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Why Horizon and Express Scripts Woes Might Make DepoMed Dirt Cheap

Investing in the drug business via biotechs and pharma stocks has become much more complicated of late. On top of political pressure over drug pricing, and companies being targeted by short sellers and anti-activists, companies that wholesale and retail drugs are occasionally putting drug companies in their bullseye.

DepoMed Inc. (NASDAQ: DEPO) is one such company that has seen its shares suffer, due to related ties after Express Scripts Holding Co. (NASDAQ: ESRX) targeted Horizon Pharma PLC (NASDAQ: HZNP). This environment has created a virtual minefield for investors of all walks of life. It also has thrashed the ambitious price targets that many analysts have for the best drug and biotechs down to the most speculative players in the space.

In a fresh report, Janney Capital Markets’ Ken Trbovich has said that bad news for Horizon Pharma is creating a buying opportunity in DepoMed.

Of course there may be more than meets the eye now in biotech and biopharma. This in particular is one of those analyst calls that projects high upside, but investors truly need to understand that uncertainty in this sector has been growing. If the pressures continue, or if even additional problems arise (and they certainly could), then the risks simply may have become more than most investors...


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