On Thursday, Barclays (LON:BARC) updated its financial outlook for argenx SE (ARGX:BB) (NASDAQ: ARGX) stock, a biotechnology company, increasing its price target from EUR650.00 to EUR670.00.
The firm maintained its Overweight rating on the stock. The revision follows argenx's positive Phase 2 analysis of the ALKIVIA trial, which demonstrated statistically significant results across all subtypes.
The analyst from Barclays revised the probability of success (POS) for the drug from 15% to 50%, leading to a substantial increase in the net present value (NPV) per share from EUR11 to EUR38, a 245% rise. This adjustment was made in light of the recent trial outcomes and updated foreign exchange rates.
Additionally, the forecast for the company's operating expenses beyond fiscal year 2026 has been modified to reflect a slower growth rate compared to revenues.
Barclays' updated price target of EUR670 per share is based on argenx's anticipated first profitable year, using an enterprise value-to-sales (EV/Sales) valuation method. The new target maintains a 9.9 times EV/FY25E sales multiple, which is a slight increase from the previously projected 9.8 times multiple.
The analyst highlighted that the positive trial results provide a clear path for argenx's progress into the end of 2024 and through 2025. This update underscores the company's potential in the biotech industry and its upcoming profitability.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.