JMP Securities Initiated Coverage on Chelsea Therapeutics and SolarWinds

JMP Securities initiated coverage on Chelsea Therapeutics International (NASDAQ: CHTP) and SolarWinds (NYSE: SWI) with a Market Outperform rating in JMP's morning note published Thursday.

Analyst Jason Butler initiated coverage on Chelsea Therapeutics with a Market Outperform rating and $8.00 price target. This development-stage biopharmaceutical company is currently working on a treatment for neurogenic orthostatic hypotension (NOH) called Northera. JMP Securities reported, "Northera is currently being reviewed by the FDA and an Advisory Committee meeting is scheduled for January 14, 2014. We believe the company has addressed issues raised in a previous Complete Response Letter for Northera, including the generation of new clinical data to support the drug's efficacy. We believe that the probability of a positive outcome for the upcoming AdComm is favorable."

Butler sees this commercial opportunity as attractive due to a lack of alternate treatments and projects approximately $330 million in sales by 2018.

JMP analyst Greg McDowell initiated coverage on SolarWinds with a Market Outperform rating and $43.00 price target. McDowell commented, "We like SolarWinds because of its ability to deliver strong growth and "best-in- class" operating margins of over 40%. Additionally, we believe: 1) estimates have become significantly de-risked heading into 2014; 2) license growth rates hit a bottom in 3Q, therefore, we expect a beat-and- raise year with organic growth set to reaccelerate (albeit off easy comps); and 3) that although many of SolarWinds challenges in 2013 have been self-inflicted, the core network management software market remains healthy, unsaturated, and underpenetrated, based on our due diligence."

The analyst estimated 2013 and 2014 non-GAAP estimated EPS for SolarWinds of $1.56 for each year versus consensus of $1.56 and $1.55, respectively.