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Esperion Therapeutics (NASDAQ:ESPR) added ~15% pre-market Thursday after Bank of America upgraded the stock to Buy from Underperform, citing a near-term upside from a potential settlement with its development partner Daiichi Sankyo (OTCPK:DSKYF) (OTCPK:DSNKY).
In March, BofA downgraded the stock to Underperform after Esperion (ESPR) announced a dispute between the companies over an agreement related to cholesterol-lowering agent bempedoic acid (BA).
The dispute led to a court case after Daiichi Sankyo Europe (DSE) argued that Esperion (ESPR) is not entitled to a $300M milestone payment as its CLEAR Outcomes trial for BA did not reach the main goal.
However, BofA analyst Jason Zemansky expects a potential settlement between the partners. Citing views from experts, Zemansky notes that “a settlement could make strategic/financial sense,” given the need for capital and intention to shift attention to the BA, which is Esperion’s (ESPR) lead asset.
Despite concerns about BA’s commercial opportunity and the company’s financial position, “we think the potential upside to shares at current levels represents a good near-term opportunity,” the analyst wrote, raising his price target to $4.00 from $1.50 per share.