UPDATE: Piper Jaffray Color on Akorn Initiation

Piper Jaffray, which initiated coverage of Akorn (NASDAQ: AKRX), is providing some color on the stock.

“We are initiating coverage of Akorn, Inc. with an Overweight rating and $10 price target,” Piper Jaffray writes. “Akorn's expanding generics portfolio, mainly focused on ophthalmics and injectables, provides the foundation for compelling earnings growth in the coming years in our view, particularly given that there are only a handful of companies with strong capabilities in these categories.

“We believe there is over $200M worth of new sales opportunity for AKRX, based on a deep pipeline of 20 pending abbreviated NDA (aNDA) filings, representing over $3.1B in annual sales, with another 10 filings, representing near $1B in annual sales, likely in 2Q/3Q11. AKRX's 2011 and 2012 P/E's of 26x and 18x, respectively, are well below our estimated 2011-2014 EPS CAGR of 36%.

“This is suggestive of an attractive risk/reward in our view, with high visibility on new launches, bearing in mind none of the aNDA's are litigated patent challenges (i.e., paragraph IV).”

Akorn closed Friday at $6.54.