Impax Weakness Overblown, Cash Still Flowing; Piper Jaffray (IPXL)

Impax Laboratories (NASDAQ: IPXL) has been hit hard in the past week, but Piper Jaffray analysts David Amsellem and Michael Dinerman think that this is mostly due to general market weakness. There are also concerns about stagnant market share for its Adderal XR (AXR) generic.

Impax's AXR generic has had a 15-17% share of the Adderall market over the last 2 months, down from 24% in February.

IPXL has said that supply on AXR has been limited, but Piper Jaffray believes a near term resolution with brand name Adderall manufacturer Shire (ADR)(NASDAQ: SHPGY) is likely.

Impax has one of the best cash flows in specialty pharma, according to Piper Jaffray. The company will have $350 million in cash by the end of this year, and over $500 million in cash by the end of 2011, while on a market cap of $1.2 billion.

Piper Jaffray reiterated an Overweight rating and a price target of $26.00.

IPXL is currently trading at $18.07.

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