On Monday, EF Hutton initiated coverage on Trevi Therapeutics (NASDAQ: NASDAQ:TRVI), a clinical-stage biopharmaceutical company, with a Buy rating and a price target of $21.00.
Trevi Therapeutics is currently engaged in developing Haduvio, its lead product, aimed at treating refractory chronic cough (RCC) in idiopathic pulmonary fibrosis (IPF) patients.
The firm's positive outlook on Trevi Therapeutics is influenced by the clinical data that suggests a reduced risk for the ongoing trials expected to report results within the next year. The analyst from EF Hutton believes that the data sets support the potential success of Haduvio in suppressing coughs related to IPF and RCC.
In their financial models, EF Hutton applies a probability of success (POS) of 70% for IPF indications and 50% for chronic cough. They also incorporate a 30% discount rate and anticipate further capital raises that could affect the final share count.
These projections are incorporated into their Free Cash Flow to the Firm (FCFF) discounted EPS and sum-of-the-parts (SOP) models. The models are equal-weighted, averaged, and rounded to the nearest whole number to establish the 12-month price target.
Trevi recently reported progress in its clinical trials for chronic cough and idiopathic pulmonary fibrosis (IPF) treatments. In the company's Second Quarter 2024 Earnings Conference Call, it was revealed that Trevi incurred a net loss of $12.4 million for the quarter, but with funding secured until 2026, the company continues to advance several trials. The RIVER trial for refractory chronic cough (RCC) is 80% enrolled, with key data expected by the end of 2024. The CORAL Phase 2b trial for IPF chronic cough is also enrolling, with topline data anticipated in the first half of 2025.
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