PRA gains another “buy” recommendation

Add John Kreger of William Blair & Co. to the list of Wall Street analysts that have rated newly public PRA Health Sciences a “buy” or its equivalent.

Kreger projects that the Raleigh-based contract research organization, or CRO, should benefit from: last year’s acquisition of RPS, a 4,000 employee company which was headquartered in Pennsylvania; a strong management team; and robust market demand.

“This management team, in our opinion, should be able to transform what had been a marginally profitable RPS asset into a business that can generate (higher margins) and could become a unique cross-selling tool into the large pharma segment,” wrote Kreger.

Kreger noted that PRA’s traditional strength has been “small and midsize biopharma clients – the category seeing the highest levels of funding and spending growth at present, and the category that has been most aggressive with outsourcing.”

CROs like PRA help pharmaceutical and biotechnology companies test experimental drugs and analyze the results.

Last month PRA went public at $18 per share, below its target price of between $20 and $23. But its shares have fared well since then and closed Friday at $24.39, down 73 cents.

Six of seven analysts who have initiated coverage of PRA since it went public have rated it either “buy” or “outperform.”