On Wednesday, Stifel maintained its Hold rating on shares of Travere Therapeutics (NASDAQ:TVTX) but increased the price target to $13.00 from the previous $10.00. The adjustment comes after a comprehensive review of the company's progress, specifically the recent developments concerning its drug candidate Sparsentan.
The firm's evaluation followed Travere's participation in the PARASOL workshop and updates on Homocystinuria (HCU). Stifel's assessment suggests that the PARASOL workshop represents progress for the FDA to examine more closely the Phase 3 DUPLEX study of Sparsentan, especially regarding proteinuria versus eGFR (glomerular filtration rate).
However, the firm noted that the potential for a supplemental New Drug Application (sNDA) for Sparsentan without conducting a new study remains uncertain. Travere intends to consult with the FDA later in the year to discuss the next steps.
Stifel has incorporated a 40% risk-adjusted credit for FSGS (Focal Segmental Glomerulosclerosis) in its revised model for Travere. The firm poses the question of whether the FDA's PARASOL workshop is geared towards contemplating future FSGS studies or if it will consider a post hoc analysis of the DUPLEX study.
Moreover, the updated price target reflects a delay in revenue projections for HCU treatments. This comes after Travere announced a voluntary pause in the enrollment for a Phase 3 study of pegtibatinase due to issues related to manufacturing scalability.
The new price target of $13 reflects these updates and considerations, marking an increase from the previous target of $10. This change underscores the ongoing developments and regulatory interactions that could influence Travere's market position and the future of its product pipeline.
In other recent news, Travere Therapeutics has announced a temporary pause in patient enrollment for the Phase III HARMONY study of pegtibatinase, a treatment for Homocystinuria (HCU), due to a technical issue identified during the manufacturing scale-up process.
This has led to Canaccord Genuity, Citi, and H.C. Wainwright adjusting their price targets for Travere, while maintaining their Buy ratings. The pause is expected to delay the HCU program by two years, pushing the projected introduction of pegtibatinase in the U.S. and European markets to 2029 and 2030, respectively.
In contrast, Barclays has increased Travere's stock price target, maintaining an Overweight rating, due to anticipated positive regulatory developments that could enhance U.S. peak sales potential by over $300 million. This is largely based on updates on Focal Segmental Glomerulosclerosis (FSGS), which are expected to provide significant operating leverage for the company.
Furthermore, Travere's drug Filspari has received full FDA approval for the treatment of adult patients with primary Immunoglobulin A nephropathy, leading to a 37% increase in sales from the first quarter, reaching $27.1 million in the second quarter of 2024.
Lastly, Travere Therapeutics reported a robust financial position, with $325.4 million in cash and securities, expected to support its operations into 2028. These are the recent developments in Travere Therapeutics.
InvestingPro Insights
Travere Therapeutics (NASDAQ:TVTX) has shown remarkable market performance recently, with InvestingPro data revealing a 121.72% price total return over the past six months and a 113.62% return over the last year. This aligns with Stifel's increased price target and reflects investor optimism about the company's potential.
However, InvestingPro Tips caution that TVTX is currently trading near its 52-week high and the RSI suggests the stock may be in overbought territory. This could indicate that the recent price surge might be nearing its peak, which investors should consider in light of Stifel's Hold rating.
Despite the strong market performance, it is important to note that Travere is not yet profitable, with a negative gross profit margin of -31.44% in the last twelve months as of Q2 2023. This underscores the importance of the company's ongoing drug development efforts, particularly with Sparsentan and the HCU treatment program.
For investors seeking a more comprehensive analysis, InvestingPro offers 15 additional tips for TVTX, providing a deeper understanding of the company's financial health and market position.
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