Sucampo Pharmaceuticals (NASDAQ:SCMP) stock price rallied sharply in the last three months, surging more than 74%. Despite the recent rally, Sucampo Pharmaceuticals’ stock has strong upside potential, supported by its improving financial numbers and the progress in its two key pipeline products. Analysts have also upgraded SCMP stock price amid its strong pipeline.

Analyst Chris Marai said, “The Company’s Phase 2/3 pipeline asset VTS-270 for Niemann-Pick Disease Type C1 alone could be worth $29 per share.”

Nomura Securities has increased their target price for Sucampo Pharmaceuticals to $43, representing upside of more than 157% from the current level.

Moreover, the company has also impressed other big companies, representing the strength of its pipeline and existing products.

Recently, Sucampo has received a takeover offer from Mallinckrodt (NYSE:MNK). Mallinckrodt said it would be happy to pay $18 per share in cash for a total price of $1.2B. The MNK management team said they expect Sucampo earnings per share to be in the range of $0.30 in 2018 and $0.60 in the following year.             

Sucampo has recently updated its guidance for the full FY2017. Sucampo Pharmaceuticals now expects its revenue to be in the range of $255.0 million, compared to the earlier estimate $220 million. Moreover, the management expects its earnings per share to hit $1.15 per share, significantly higher compared to the past year earnings of $0.42 per share.

“Our base business remains strong, driven by increasing AMITIZA product sales in the United States and Japan. Today we are increasing our 2017 guidance for all key financial metrics based on stronger than expected sales of AMITIZA in these two markets,” said Peter Greenleaf, Chairman and Chief Executive Officer of Sucampo.

In the latest quarter, its AMITIZA net sales increased 6% to $115.2 million, compared to $108.8 million in the same period in 2016.

Although its share prices gained 74% in the last twelve months, the company’s stock has significant upside potential considering analyst’s price target, the potential growth in its financial numbers, and the recent takeover interest from Mallinckrodt. Overall, Sucampo Pharmaceuticals has established strong footholds for the future growth. Therefore, analyst’s price target predictions certainly look true.

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