On Monday, H.C. Wainwright maintained a positive stance on Zevra Therapeutics, Inc. (NASDAQ:ZVRA) shares, reiterating a Buy rating with a price target of $20.00. The firm's outlook remains optimistic despite ZVRA's stock experiencing a roughly 14% decline compared to the XBI's 3% dip since the previous Friday's approval of Miplyffa (arimoclomol) for Niemann-Pick disease type C (NPC).
The analyst noted that the unexpected FDA approval of a competing therapy, IntraBio's Aqneursa (levacetylleucine), on the following Tuesday, might have contributed to the market's reaction. While the approval of Aqneursa came as a surprise to some, given that it did not have an FDA Advisory Committee (AdCom) review like Miplyffa, and IntraBio is a private company, it was anticipated by H.C. Wainwright and is not seen as a significant threat to Miplyffa's market launch.
Zevra Therapeutics is considered undervalued by the analyst, especially after the recent pullback in stock price. The company's pro forma cash of $114 million at the end of the second quarter is expected to sustain the company until it reaches a break-even point.
This forecast does not take into account potential revenue from the sale of a Rare Pediatric Disease Priority Review Voucher (PRV) received by the company, which could be worth more than $100 million, as recent transactions have been around $160 million.
Including a hypothetical $120 million value for the PRV, Zevra's current enterprise value is estimated to be under $200 million, which H.C. Wainwright views as an overly pessimistic market assessment. The firm's reiterated Buy rating and $20 price target reflect confidence in Zevra Therapeutics' market potential and financial position.
In other recent news, analyst firms including Maxim Group, Roth/MKM, and JMP Securities have responded to these developments by upgrading their stock price targets for Zevra, maintaining buy ratings. Maxim Group has increased its target from $18.00 to $25.00, Roth/MKM from $19.00 to $21.00, and JMP Securities set a new target at $17.00.
In financial news, the company reported a net revenue of $4.4 million and a net loss of $19.9 million in its Q2 2024 earnings call. Despite the loss, analysts from Canaccord Genuity have maintained a buy rating on Zevra, although they revised their price target downwards. These recent developments highlight Zevra Therapeutics' ongoing commitment to addressing unmet medical needs in the rare disease sector.
InvestingPro Insights
Recent InvestingPro data provides additional context to Zevra Therapeutics' (NASDAQ:ZVRA) financial situation and market performance. Despite H.C. Wainwright's optimistic outlook, the company faces some challenges. InvestingPro Tips indicate that Zevra is "quickly burning through cash" and is "not profitable over the last twelve months." This aligns with the article's mention of the company's reliance on its pro forma cash to sustain operations until reaching a break-even point.
However, it's worth noting that Zevra's revenue growth stands at an impressive 43.21% over the last twelve months, according to InvestingPro data. This growth, coupled with a gross profit margin of 75.13%, suggests potential for future profitability if the company can manage its expenses effectively.
The stock's recent performance has been volatile, with InvestingPro data showing a strong 41.22% return over the last three months, despite an 8.71% decline in the past week. This volatility is consistent with the market's reaction to recent events described in the article, including the FDA approvals and competitive landscape changes.
For investors seeking a more comprehensive analysis, InvestingPro offers 11 additional tips for Zevra Therapeutics, providing a deeper understanding of the company's financial health and market position.
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