Aegis Capital Initiates Coverage On Auxilium Pharmaceuticals, Favors Acquisition

In a report released Thursday, Aegis Capital analyst Raghuram Selvaraju initiated coverage on Auxilium Pharmaceuticals (NASDAQ: AUXL) with a Buy rating and a $37.00 price target.

Auxilium announced on Thursday it will acquire QLT (NASDAQ: QLT) for 3.1359 shares of Auxilium stock, equivalent to a 25 percent premium based on QLT's stock price on June 25, 2014. The merger is expected to close later in the fourth quarter of 2014.

Analysts at Aegis are bullish on the acquisition of QLT because of synergies, the deal giving Auxilium shareholders projecting to receiving 76 percent of the combined companies on a fully diluted basis and favors the Auxilium drug Xiaflex™ with the synergies given.

Selvaraju adds that Auxilium is acquiring QLT for a great price and the stock offering adds a substantial amount of value to Auxilium shareholders.