On Tuesday, Piper Sandler confirmed its positive stance on Abivax (NASDAQ: ABVX) by reiterating an Overweight rating with a steady price target of $42.00. The stock, currently trading at $7.77, sits near its 52-week low, while InvestingPro data shows strong analyst consensus with price targets ranging from $16 to $50.
The firm's analysis is based on new survey data which shows that Skyrizi and Rinvoq, two drugs in the market for ulcerative colitis (UC) and Crohn's disease (CD), are continuing to gain a strong share. This growing market presence has led to an increase in revenue estimates for both medications.
The analyst from Piper Sandler highlighted that despite the rising adoption rates of these treatments and the variety of options available, there is still a significant unmet need in the treatment of UC and CD. While Abivax maintains a healthy financial position with a current ratio of 3.04 and more cash than debt, InvestingPro analysis indicates the company is rapidly burning through cash as it advances its clinical programs.
According to the recent survey, obefazimod, Abivax's drug currently in a Phase 3 induction study with expected data in the second quarter of 2025, is highly anticipated by doctors, who view it as the most sought-after pipeline agent for UC. In comparison, the anti-TL1A tulisokibart is seen as a less favorable upcoming option.
In the CD market, the analyst pointed out that even with the anticipated approvals of Tremfya and Omvoh in 2025, healthcare professionals do not regard all IL-23 inhibitors as equal. Skyrizi is notably ranked as the top choice among these professionals, indicating a preference for its efficacy or mode of action over its competitors.
The survey not only underscores the potential of Abivax's obefazimod in meeting the existing treatment gaps but also emphasizes the strong position of Skyrizi in the preferences of medical practitioners. This data is instrumental in shaping the outlook for Abivax's performance in the biopharmaceutical market, particularly in the segments dealing with UC and CD.
As the market for UC and CD treatments evolves, the findings from the survey are expected to influence the strategic decisions of Abivax and other pharmaceutical companies looking to address the unmet medical needs in these therapeutic areas.
The reaffirmed Overweight rating and price target reflect confidence in Abivax's growth trajectory and the anticipated impact of its pipeline products on the company's valuation.
According to InvestingPro analysis, the stock appears undervalued compared to its Fair Value, with 10 additional ProTips available to subscribers that could provide deeper insights into the company's potential.
In other recent news, Abivax has seen significant progress in its clinical trials for obefazimod, a drug aimed at treating inflammatory bowel diseases (IBD). JMP Securities initiated coverage on Abivax with a Market Outperform rating, citing promising Phase 3 trials and potential commercial success. The firm projects that obefazimod could achieve peak global sales of approximately $2.5 billion in ulcerative colitis treatment and around $2.6 billion for Crohn's disease treatment.
Abivax also recently appointed industry veteran Mark Stenhouse as an advisor, a move expected to contribute significantly to the company's strategic direction. This decision reflects Abivax's commitment to leveraging industry experience to advance its clinical programs.
Analysts from Guggenheim, Piper Sandler, and BTIG have all maintained a positive outlook on Abivax, emphasizing the potential of obefazimod. Guggenheim's rating follows a meeting with Abivax's management team, while Piper Sandler's Overweight rating is driven by upcoming developments related to obefazimod. BTIG maintains its Buy rating on Abivax based on recent preclinical data indicating that the combination of obefazimod with etrasimod shows a synergistic effect in reducing cytokine levels.
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