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On Wednesday, Chardan Capital Markets initiated coverage on Palvella Therapeutics with a Buy rating and a price target of $50.00, falling within the current analyst range of $38-$70. According to InvestingPro data, the stock has shown strong momentum with a 70.92% gain year-to-date. The rating is based on the potential of Palvella's QTORIN topical rapamycin gel for treating mTOR-driven genetic skin diseases and the possibility of further development of similar topical drug products.
QTORIN is a 3.9% rapamycin anhydrous gel, specifically designed to inhibit the target robustly in the dermis while minimizing the toxicities associated with systemic exposure to rapamycin. Palvella Therapeutics is progressing QTORIN through late-stage clinical trials for two vascular conditions: microcystic lymphatic malformations (MLMs) and cutaneous venous malformations (CVMs). These conditions, characterized by abnormal vascular growth that leads to discomfort and morbidity, are estimated to affect over 30,000 and 75,000 patients in the U.S., respectively.
The conditions are caused by somatic mutations that result in elevated mTOR signaling. While systemic rapamycin has shown efficacy for these indications, its broad use as a long-term treatment is limited due to side effects. Palvella's QTORIN, however, has demonstrated statistically significant efficacy in a Phase II trial for MLMs. The company is leveraging similar endpoints in its ongoing Phase III SELVA trial for MLMs, with results expected in the first quarter of 2026.
The Phase II TOIVA trial for CVMs is also underway, with results anticipated in the fourth quarter of 2025. Furthermore, Palvella plans to reveal an additional mTOR-driven indication and a new topical inhibitor program in the second half of 2025. These developments are strategically planned within the company's cash runway, which extends into the second half of 2027, offering multiple opportunities for value creation in the near future. InvestingPro analysis shows the company maintains a strong financial health score of 2.72 (rated as GOOD), with a current ratio of 7.33 indicating robust liquidity. The company's market capitalization stands at $226 million, with its next earnings report expected on June 16, 2025. For deeper insights into Palvella's financial health and growth prospects, investors can access the comprehensive Pro Research Report, available exclusively on InvestingPro.
In other recent news, Palvella Therapeutics reported a net loss of $17.4 million for the year 2024, as outlined in their Q4 earnings call. Despite this, the company is advancing its lead product, Cutorin Rapamycin, with plans for a potential commercial launch. Palvella ended the fourth quarter with $83 million in cash and equivalents, securing a cash runway into the second half of 2027. Analysts at Stifel reiterated their Buy rating on Palvella with a price target of $45, citing optimism from the company's promising clinical trial results for its key drug, QTORIN rapamycin. The company has initiated Phase 3 trials for microcystic lymphatic malformations and Phase 2 trials for cutaneous venous malformations. Palvella plans to spend approximately $30 million in 2025, with significant investments in research and development and general and administrative expenses. The company expects to maintain a cash balance of at least $55 million by the end of 2025. These developments reflect Palvella's strategic focus on advancing its pipeline and preparing for future commercial endeavors.
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