Citi adjusted its outlook on Travere Therapeutics (NASDAQ:TVTX), reducing the price target to $19 from $23 while maintaining a Buy rating. The revision comes after an unexpected halt in the Phase 3 Homocystinuria (HCU) trial enrollment due to issues with drug production at the contract development and manufacturing organization (CDMO) level.
The manufacturing scale-up of pegtibatinase did not meet the required specifications, prompting a pause.
The delay in the HCU trial was not anticipated and reflects the inherent market risks faced by biopharmaceutical companies relying on CDMOs for drug production. Despite the setback, the analyst noted that the HCU top-line readout, originally modeled for 2026, has not been a significant focus for investors. The revised guidance anticipates enrollment to resume in 2026, with the projected launch date now pushed from 2027 to 2029, leading to the lowered price target.
The firm believes that the current weakness in Travere's stock presents an opportunity to accumulate shares. The full approval of Filspari, which is expected to support revenue acceleration, and the upcoming potential catalyst in the fourth quarter of 2024 regarding the path forward in Focal Segmental Glomerulosclerosis (FSGS) with the Parasol working group's conclusions on endpoints, are seen as near-term upside drivers for the stock.
The analyst's comments highlighted that while the delay is a setback, the company's prospects remain positive with other developments on the horizon. The full approval of Filspari is a significant achievement for Travere, and the forthcoming decisions on FSGS treatment endpoints are anticipated to provide further direction for the company's growth.
Travere Therapeutics has experienced significant developments. The company has paused enrollment in its Phase 3 HARMONY study, which is evaluating pegtibatinase for classical homocystinuria, due to manufacturing scale-up issues. H.C. Wainwright, BofA Securities, and Canaccord Genuity have maintained their Buy ratings on Travere Therapeutics, despite the pause and the subsequent adjustment of the price target to $18.00.
Travere's drug Filspari has received full FDA approval for the treatment of adult patients with primary Immunoglobulin A nephropathy, leading to a potential increase in sales. Filspari sales reached $27.1 million in the second quarter of 2024, a 37% increase over the first quarter.
Canaccord Genuity and Citi have raised their price targets for Travere. Lastly, Travere Therapeutics reported a solid financial position, with $325.4 million in cash and securities, supporting its operations into 2028.
InvestingPro Insights
As Travere Therapeutics navigates through its recent trial enrollment delay, real-time data and insights from InvestingPro may offer investors a clearer picture of the company's financial health. With a market capitalization of $1.15 billion, Travere is trading at a high Price / Book multiple of 75.95, reflecting investor optimism about the company's assets, despite not being profitable over the last twelve months. The company's revenue growth has been robust, with an increase of 47.42% over the last twelve months as of Q2 2024, and an even more impressive quarterly revenue growth of 68.08% in Q2 2024.
InvestingPro Tips highlight that Travere has been quickly burning through cash, which could be a concern for investors considering the manufacturing issues that have arisen. Additionally, the stock is currently indicated to be in overbought territory according to the Relative Strength Index (RSI), suggesting that it might be due for a correction. Despite these challenges, the company's liquid assets exceed its short-term obligations, indicating a level of financial resilience.
For investors looking for more in-depth analysis, there are additional tips available on InvestingPro that delve into Travere's financial metrics and market performance. These insights could prove invaluable for those considering whether to take advantage of the current weakness in Travere's stock as an investment opportunity.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.