Calliditas Therapeutics stock target cut on Asahi Kasei’s acquisition offer By Investing.com

On Tuesday, Stifel, a financial services firm, downgraded shares of Calliditas Therapeutics (NASDAQ:CALT) from “Buy” to “Hold,” adjusting the price target to $40, down from the previous $55. This change follows the news of Asahi Kasei’s acquisition offer for the company at approximately $40 per American Depositary Receipt (ADR), which has been approved by the boards of both companies.

The offer by Asahi Kasei, a Japanese multinational company, translates to 3,076 Japanese yen or 208 Swedish kronor per share of Calliditas, or 416 Swedish kronor per ADR. This acquisition bid came shortly after Calliditas’ drug Tarpeyo received full approval for a new indication, which is expected to reduce kidney loss without limitations on urine protein-to-creatinine ratio (UPCR), leading to increased patient enrollments and a growing number of physicians prescribing the treatment.

Calliditas is currently engaged in negotiations with payers to update formulary policies and anticipates an update to the Kidney Disease: Improving Global Outcomes (KDIGO) guidelines. These developments are likely to support the broader adoption of Tarpeyo.

Despite Calliditas tracking towards profitability in the second half of 2024, Stifel notes that the financial capabilities of Asahi Kasei could enhance Calliditas’ operations in the competitive IgA Nephropathy (IgAN) market.

Moreover, Calliditas is expanding its focus to additional rare diseases with its anti-fibrotic drug setanaxib, which has shown proof of concept in squamous cell carcinoma of the head and neck (SCCHN) and is expected to release further data on primary biliary cholangitis (PBC) and idiopathic pulmonary fibrosis (IPF). Stifel’s downgrade to “Hold” reflects these recent developments and the anticipated impact of Asahi Kasei’s acquisition offer.

InvestingPro Insights

In light of the recent developments surrounding Calliditas Therapeutics, including the acquisition offer and drug approvals, the company’s financial data and market performance offer additional context.

According to InvestingPro data, Calliditas has a market capitalization of $2.04 billion and has experienced a significant revenue growth of 50.32% over the last twelve months as of Q4 2023. This is complemented by an impressive gross profit margin of 94.99% in the same period. Still, the company is not yet profitable, with analysts not expecting profitability this year, which aligns with Stifel’s observation that Calliditas is tracking towards profitability in the second half of 2024.

InvestingPro Tips highlight that while Calliditas operates with a moderate level of debt and its liquid assets exceed short-term obligations, it is trading near its 52-week high, and at a high Price/Book multiple of 18.21. These metrics suggest that investors are valuing the company’s future growth prospects, particularly in the wake of its drug Tarpeyo’s full approval and the potential boost from Asahi Kasei’s financial capabilities.

For readers interested in a deeper analysis, there are additional InvestingPro Tips available at: https://www.investing.com/pro/CALT. To enhance your investment strategy with these insights, use the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription. With the current market dynamics, staying informed with comprehensive metrics and expert analysis could be more crucial than ever for investors.

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