We note this morning’s announcement that Vernalis’ US partner Tris Pharma has commenced 12-month stability testing on manufactured batches of CCP-08, in line with our expectations. In addition, we have updated our forecasts following FY2015 results (18 months) and the subsequent acquisition of US rights to Moxatag®. The net result is a reduction in target price from 93p to 86p, mainly as a result of a more conservative stance on the initial pricing of TuzistraTM XR, the company’s lead long-acting prescription cough cold medicine ($90 net per prescription vs. $100 previously expected for the FY2015/16 flu season, net of rebates, co-pay contributions by Vernalis and launch incentives). However, we are encouraged by the company’s carefully laid out plans for the ongoing launch, including its Stock Now campaign to US pharmacies. We retain a Buy recommendation.
