Avanir Shares Rebound As Analysts Offer Defense On Heels of 13% Drop

Avanir Pharmeceuticals (NASDAQ: AVNR) stock plummeted yesterday after Gravity Research said Avanir, “engaged in illegal off-label marketing of Nuedexta,” and recommended a strong Sell.

Shares closed at $4.79 on Wednesday, a 13 percent decrease. This was the biggest drop of AVNR in three years.

Today, several analysts had positive comments on Avanir shares following the large decline.

• Summer Street analyst Carol Werther, after speaking with Avanir management, said the company "vehemently" denied the claims. She reiterated a Buy rating and $17 price target.
• Wedbush's Gregory Wade said, " the author's choice to publish this report betrays his/her conviction level since, as it transiently lowers AVNR's stock price, it would be anticipated (if others follow the report's advice) to increase the costs associated with borrowing the stock to maintain short positions... onsidering that the Paragraph IV challenge outcome is likely by YE:13, we can only conclude that the report itself was created to drive AVNR's shares down for the express purpose of the author's profiting from an already established short position." The analyst reiterated an Outperform rating and $8 target.
• Analyst Mario Corso with Mizuho noted the company is confident in the compliance program. He believes the Gravity report was "off the mark."
• Canaccord analyst Ritu Baral went even further to note AVNR's “robust” patents and high probability of winning the generic lawsuit. Baral recommends Buy with $6 PT.

Avanir shares up more than 4 percent to $4.99.