Story updated at 9:55 a.m. to reflect market activity.
Mallinckrodt gained 1.9% to $80.39 in morning trading.
The firm also raised its EPS estimates for the company. UBS analyst Marc Goodman cited the price increase of Ofirmex as a reason for the price target increase.
"We conservatively assume 50% of the 140% price increase would flow through, but the flow through could be higher," Goodman wrote. "We also assume the substantial price increase would negatively impact volume growth, so we slowed our growth rate assumptions with a substantially greater impact initially, which tapers off in later quarters. The net effect is an increase in FY2015-2016 revenues in the $60-70M per year range, which increases our pro-forma EPS to $6.15 and $7.25 (from $5.85 and $7.00), respectively. If our assumptions prove conservative, we could see upside to our numbers."
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