RBC Capital Markets has adjusted its outlook on Verve Therapeutics (NASDAQ: VERV) shares, reducing the price target to $20.00 from the previous $25.00, while continuing to recommend the stock as Outperform.
The adjustment follows Verve Therapeutics' recent earnings report for the second quarter. Despite a pause in enrollment for the company's first-generation PCSK9 due to an investigation into certain side effects, RBC Capital maintains a positive view of the stock's future.
Verve Therapeutics is currently addressing an issue with its first-gen PCSK9 treatment related to elevated liver enzymes (ALT) and a decrease in platelets (thrombocytopenia). The company has indicated that the issue is likely associated with the lipid nanoparticle (LNP) delivery system rather than the gene editing tool itself.
Meanwhile, Verve has successfully dosed the first patient with its next-generation PCSK9 therapy, which utilizes GalNAc and indirectly benefits from learnings by NTLA. Initial data from this next-gen treatment is expected in the first half of 2025.
Additionally, Verve's ANGPTL3 gene-editing therapy remains on schedule to enter clinical trials in the second half of 2024. This therapy targets a different gene associated with cholesterol and triglyceride levels in the blood and may provide an alternative treatment option.
Despite the challenges with the first-gen PCSK9 treatment, RBC Capital suggests that the potential for a safe delivery of the therapy, informed by NTLA's indirect validation, makes Verve an attractive investment. The firm's lowered price target reflects the recent quarterly update and the temporary setback with the first-gen therapy.
RBC Capital's stance on Verve Therapeutics is based on the belief that the company's gene-editing approach could offer a solution to patient compliance issues in cholesterol management, a significant concern in the current treatment landscape.
Verve Therapeutics recently announced a leadership transition, with Troy Lister, Ph.D., taking over as Chief Scientific Officer, succeeding Andrew Bellinger, M.D., Ph.D. Dr. Lister, with a rich background in drug discovery and development, is recognized for leading programs into first-in-human studies and advancing early clinical development.
In parallel, Jefferies adjusted its price target for Verve Therapeutics, reducing it to $28 from $31 but maintaining a Buy rating. This adjustment followed a recent update from the company regarding its ongoing clinical studies and financial status. Verve Therapeutics has initiated dosing of patients in its Phase 1b Heart-2 study, evaluating VERVE-102, the company's second-generation PCSK9 base editing therapy, with meaningful data expected by 2025.
InvestingPro Insights
In the wake of RBC Capital Markets' revised outlook on Verve Therapeutics, it's valuable to consider additional insights that could impact investor perspectives. According to InvestingPro data, Verve Therapeutics has a market capitalization of approximately $456.77 million, signaling a moderate size within the biotech industry. Despite a remarkable revenue growth rate of nearly 280% over the last twelve months as of Q2 2024, the company's gross profit margin is deeply negative at -795.71% for the same period, indicating significant costs relative to revenue. This financial metric aligns with RBC Capital's cautious stance due to the current challenges faced by the company.
InvestingPro Tips suggest a mixed financial health for Verve. While the company holds more cash than debt, indicating a strong balance sheet, it is quickly burning through cash and has not been profitable over the last twelve months. These factors are critical for investors to monitor, as they may affect the company's ability to fund ongoing research and development efforts without additional financing. Furthermore, the stock has experienced a substantial decline over the past year, with a price total return of -68.97%.
For investors seeking a deeper understanding of Verve Therapeutics' financials and future prospects, additional InvestingPro Tips are available, providing a comprehensive analysis of the company's performance and potential. Currently, there are 10 more tips listed on InvestingPro, which can be accessed for a more detailed investment strategy.
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