Bernstein sees TI’s likely price hike benefiting Infineon, Renesas stock
On Tuesday, Bernstein SocGen Group adjusted its outlook on Biohaven Pharmaceutical (TADAWUL:2070) Holding (NYSE:BHVN), reducing the price target from $73.00 to $57.00, while continuing to recommend the stock as Outperform. The adjustment follows a challenging fourth-quarter update from Biohaven, which presented mixed results for its degrader Phase 1 multiple ascending dose (MAD) study. The data showed a solid 80% reduction in IgG at four weeks, but the time to peak reduction did not appear to be differentiated when compared to FcRn inhibitors. According to InvestingPro data, the company maintains a healthy current ratio of 3.49 and holds more cash than debt on its balance sheet, though it’s currently experiencing rapid cash burn.
The company’s stock closed down 14%, reflecting investor concerns, which according to the analyst, are primarily focused on the degrader platform and potential cash needs before the next significant stock catalysts. Biohaven’s unsuccessful high-risk trial in bipolar disorder also contributed to the negative sentiment. InvestingPro data shows the stock has declined 12% in the past week and 43.15% over the last year, with the current price of $32.06 sitting well below its 52-week high of $62.21. In light of these developments, the firm’s analysts have taken a step back to reevaluate both the positive and negative perspectives on the company’s prospects.
Despite the recent challenges, Bernstein analysts remain optimistic about Biohaven’s potential but have removed it from their top pick list. The short-term investment thesis has shifted towards the company’s small chain antibody (SCA) regulatory event, which is seen as difficult to predict. However, Bernstein believes that the market is underestimating the likelihood of approval for the SCA, estimating a 75% chance of success.
The long-term value creation from Biohaven’s degrader platform is still anticipated, although it is expected to take 12-24 months to materialize and is currently not a primary concern for hedge funds. Additionally, the analysts expressed caution regarding Biohaven’s Kv7 in major depressive disorder (MDD), assigning a 30% probability of success to the treatment.
In other recent news, Biohaven Ltd. has made significant strides in its clinical development programs. The company announced that the FDA has accepted its New Drug Application for troriluzole, a potential treatment for spinocerebellar ataxia (SCA), granting it Priority Review status. This marks a critical development as troriluzole could become the first FDA-approved treatment for SCA, a rare neurodegenerative disease. Furthermore, Biohaven reported promising results from its Phase 1 study of BHV-1300, showing up to an 84% reduction in IgG levels, positioning it as a potential treatment for autoimmune diseases like Graves’ disease.
Deutsche Bank (ETR:DBKGn) has initiated coverage on Biohaven with a Buy rating and a $65 price target, citing the company’s clinical assets and leadership as key factors for potential growth. Piper Sandler also maintained its Overweight rating with a $76 price target, despite some setbacks in the company’s Kv7 activator, BHV-7000. The analysts expressed optimism about upcoming catalysts in 2025, including the anticipated launch of a treatment for SCA. Biohaven’s leadership and strategic direction continue to garner positive attention from analysts, reflecting confidence in the company’s future prospects.
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