Cowen initiates Palvella Therapeutics with buy, $44 target

Published 05/02/2025, 12:16
Cowen initiates Palvella Therapeutics with buy, $44 target

On Wednesday, TD Cowen began coverage on Palvella Therapeutics shares, assigning a Buy rating and setting a price target of $44.00. The stock, currently trading at $13.89, has already shown strong momentum with a 15.75% gain year-to-date. According to InvestingPro data, analyst targets range from $30 to $38, suggesting significant upside potential. The firm’s analysts highlighted the potential of Palvella’s QTORIN formulation platform, which they believe could produce multiple successful treatments for rare genetic skin diseases that currently lack adequate options. With a market capitalization of approximately $156 million and a current ratio of 2.14, InvestingPro analysis indicates the company maintains strong liquidity to support its development programs.

Palvella’s 3.9% w/w QTORIN rapamycin is currently in Phase 3 clinical trials for the treatment of Pachyonychia Congenita (PC), a rare genetic skin disorder. Cowen analysts expressed optimism about the upcoming topline data, which is expected in the first quarter of 2026. The firm’s projections estimate peak potential sales reaching approximately $956 million in the U.S. market for this treatment alone.

The SELVA trial, a single-arm Phase 3 study, will utilize Palvella’s proprietary mLM-IGA primary endpoint (EP). The design of this trial has garnered preliminary support due to strong natural history data that suggest no spontaneous remission of the disease. The analysts at Cowen believe that the QTORIN rapamycin could become the first-line standard of care for treating Pachyonychia Congenita.

Cowen’s price target of $44 for Palvella Therapeutics is primarily based on the projected sales from the Phase 3 study for Pachyonychia Congenita and the potential from a Phase 2 trial for Cutaneous Vascular Malformations (CVM). The analysts expect these combined sales to drive significant value for the company. While current financials show the company is not yet profitable, InvestingPro data reveals it operates with moderate debt levels and maintains healthy financial metrics. Subscribers can access 6 additional ProTips and comprehensive financial analysis for deeper insights into Palvella’s investment potential.

In other recent news, Palvella Therapeutics reported positive results from its Phase 2 study of QTORIN™ 3.9% rapamycin gel for treating microcystic lymphatic malformations (microcystic LMs). The study, published in the Journal of Vascular Anomalies, showed significant improvement in all participants after a 12-week treatment period. Palvella is now conducting a Phase 3 trial named SELVA, with topline data expected in Q1 2026. The U.S. Food and Drug Administration has granted QTORIN™ rapamycin Breakthrough Therapy Designation, Fast Track Designation, and Orphan Drug Designation.

In addition, H.C. Wainwright has reaffirmed a Buy rating on Palvella Therapeutics, focusing on the potential of QTORIN rapamycin, particularly for cutaneous venous malformations (VMs). The firm believes that the VM market represents a larger opportunity, potentially driving the drug’s market success. Palvella is also anticipating results from the Phase 2 TOIVA trial for cutaneous VMs in the fourth quarter of 2025.

Lastly, Pieris Pharmaceuticals (NASDAQ:PVLA) provided an update on its planned merger with Palvella Therapeutics. The merger, announced in July 2024, is progressing with Palvella set to become a wholly owned subsidiary of Pieris upon completion. The move aims to enhance Pieris’ portfolio with Palvella’s developments in therapies for rare genetic skin diseases.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

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