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.”
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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.”