Centessa stock price target raised to $42 by B.Riley on strong sleep drug data

Investing.com - B.Riley has raised its price target on Centessa Pharmaceuticals (NASDAQ:CNTA) to $42.00 from $33.00 while maintaining a Buy rating, following promising Phase 2 clinical trial results for the company’s sleep disorder drug. The stock currently trades at $29.03, just below its 52-week high of $29.99, reflecting strong investor confidence in these clinical developments.

The price target increase comes after detailed analysis of Centessa’s CRYSTAL-1 trial data, which showed its drug ORX750 achieved significant improvements in wakefulness at much lower doses than competing treatments. At just 1.5mg, ORX750 matched or exceeded the efficacy of similar drugs from Takeda and Alkermes that require 5-15 times higher dosing. With a market capitalization of $4.24 billion and a bullish analyst consensus, Centessa has attracted significant attention. InvestingPro data reveals several additional insights about the company’s financial position and growth prospects.

In narcolepsy type 2 (NT2), ORX750’s 4mg dose achieved statistically significant wakefulness improvement, marking the first such result for any drug in its class. The treatment also showed an 87% reduction in cataplexy episodes and normalized excessive sleepiness scores at low doses.

The drug demonstrated efficacy in idiopathic hypersomnia (IH) at the 2mg dose level, potentially giving Centessa a multi-quarter lead over competitors in this indication. Safety data appears favorable, with visual disturbances reported in only about 5% of patients compared to nearly 29% with a competing treatment.

B.Riley noted that the recent $2.1 billion merger between Alkermes and Avadel further validates the market opportunity for orexin receptor-targeting sleep disorder treatments, with initial market launches in this therapeutic area expected in 2026. InvestingPro analysis indicates that Centessa’s stock price movements are quite volatile and the company appears overvalued compared to its Fair Value. Investors seeking deeper insights into Centessa’s financial health, valuation metrics, and growth potential can access over a dozen additional ProTips and comprehensive analysis tools through the platform.

In other recent news, Centessa Pharmaceuticals announced the pricing of its public offering of 11.6 million American Depositary Shares (ADSs) at $21.50 each. The company anticipates raising approximately $250 million in gross proceeds from this offering. In addition, Centessa has commenced the offering, with Jefferies, Leerink Partners, Evercore ISI, and Guggenheim Securities acting as joint book-running managers. Truist Securities reaffirmed its Buy rating on Centessa, maintaining a $30.00 price target following promising preliminary data from the company’s ORX750 Phase 2a study. Guggenheim also raised its price target for Centessa to $43.00, citing encouraging trial results across various patient groups. The study focused on treatments for narcolepsy type 1, narcolepsy type 2, and idiopathic hypersomnia. All ADSs in the public offering are being sold by Centessa, with an option for underwriters to purchase an additional 15% of the ADSs offered. These developments reflect recent activities surrounding Centessa Pharmaceuticals.

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