On Friday, Jones Trading initiated coverage on Kalvista Pharmaceuticals Inc (NASDAQ:KALV), issuing a Buy rating with a price target of $35.00. This move comes despite Kalvista's shares declining approximately 20% year-to-date, contrasting with an 8% gain in the XBI biotech index.
Jones Trading suggests that investor concerns may stem from subtle questions regarding the efficacy data of Kalvista's oral sebetralstat and the potential competition posed by Pharvaris' deucrictibant, another oral treatment for hereditary angioedema (HAE). However, Jones Trading believes that the Phase 3 data for sebetralstat strongly supports its approval, with a Prescription Drug User Fee Act (PDUFA) date set for June 17, 2025. Analysts expect Kalvista's stock to rebound into the mid-teens as the approval date approaches.
The firm anticipates that following the FDA's potential approval, there might be some profit-taking, but they also see significant potential for an upside as sales figures start to roll out in the second half of 2025. Drawing parallels to Biocryst's Orladeyo, the first oral long-term prophylactic for HAE, which has secured 18% of the LTP market despite certain efficacy and tolerability issues, Jones Trading expects sebetralstat could perform even better due to its safety profile and meaningful efficacy.
While acknowledging deucrictibant as a strong competitor with a possible edge in efficacy, Jones Trading estimates its launch in the second half of 2027 and believes that sebetralstat will maintain its position in the market. The firm concludes that the market may be underestimating the prospects of sebetralstat, prompting the initiation of the Buy rating and the $35 price target.
In other recent news, KalVista Pharmaceuticals (NASDAQ:KALV) has reported significant advancements with sebetralstat, a potential treatment for hereditary angioedema (HAE). The company has announced the appointment of a new CFO, Brian Piekos, who brings over 25 years of financial and strategic planning experience in the biopharmaceutical industry.
The FDA has accepted the New Drug Application (NDA) for sebetralstat, setting a review date of June 17, 2025. The European Medicines Agency (EMA) has also begun reviewing the Marketing Authorization Application (MAA) for sebetralstat, indicating progress towards introducing the drug to the European market.
Analyst firms H.C. Wainwright and Leerink Partners have maintained a positive stance on KalVista, reiterating a Buy and Outperform rating respectively, with a $20.00 price target. KalVista has also initiated a pediatric trial for sebetralstat and plans to start a study for adolescent and adult patients in the fourth quarter of 2024.
InvestingPro Insights
As Kalvista Pharmaceuticals Inc (NASDAQ:KALV) navigates a challenging period marked by a significant year-to-date share price decline, insights from InvestingPro provide a deeper understanding of the company's financial health and market performance. Despite the recent coverage initiation by Jones Trading with a positive outlook, InvestingPro Tips indicate that Kalvista is quickly burning through cash and analysts have revised their earnings downwards for the upcoming period. This suggests that while the potential of Kalvista's sebetralstat is recognized, the company's financial sustainability remains a concern.
InvestingPro Data shows a market capitalization of $432.15M, indicating the size of the company in the competitive biotech landscape. Furthermore, the P/E Ratio stands at -2.73, reflecting the company's current lack of profitability. This is underscored by a negative operating income of $155.57M in the last twelve months as of Q1 2023, highlighting the financial challenges Kalvista faces.
With additional InvestingPro Tips available, investors can gain a more comprehensive view of Kalvista's financial position and potential trajectory. These tips, along with real-time analytics and expert analyses, are accessible through InvestingPro's platform, providing valuable resources for those considering an investment in Kalvista Pharmaceuticals.
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