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On Thursday, Goldman Sachs reinstated coverage on DBV Technologies S.A. (DBV:FP) (NASDAQ:DBVT), issuing a Sell rating with a price target set at EUR1.30. The investment firm’s analysis suggests a potential downside of 20% in the European market and 14% on the NASDAQ. The Goldman Sachs team acknowledged the strides DBV Technologies has made recently, especially concerning the regulatory progress of Viaskin Peanut (VP), which has added clarity and confidence regarding the company’s future direction.
Despite the positive developments, Goldman Sachs remains skeptical about the company’s ability to execute commercially. The analysts pointed out the risks associated with DBV Technologies’ strategy to commercialize the product independently. They also highlighted the potential impact of the Phase 3 VITESSE trial results expected in 2025. Although the outcome is anticipated to be favorable, the subsequent exercise of warrants could lead to significant dilution of shares by as much as 65%, according to Goldman Sachs’ calculations.
The investment firm predicts that this potential dilution may deter new investors from entering the stock before the results of the VITESSE trial are published. Furthermore, Goldman Sachs expects investor sentiment to stay cautious due to Viaskin Peanut’s inconsistent development history and the unpredictable commercial market, which is also influenced by competitor product launches. The analysts believe that the market will give limited credit to DBV Technologies until there is concrete proof of successful launch execution.
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