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On Wednesday, Guggenheim analyst Daniel Krizay revised the price target for Savara Inc. (NASDAQ:SVRA) to $8.00, down from the previous $9.00, while sustaining a Buy rating on the company’s stock. This adjustment came after discussions with Savara’s management following an unexpected regulatory hurdle. According to InvestingPro data, analyst targets for Savara range from $3.00 to $16.00, with the company maintaining a "Strong Buy" consensus recommendation. The company was informed by the U.S. Food and Drug Administration (FDA) that its application for Molbreevi, a proposed treatment for autoimmune pulmonary alveolar proteinosis (aPAP), could not be filed in its current form.
The FDA issued a Refusal to File (RTF) letter, indicating that the application lacked certain Chemistry, Manufacturing, and Controls (CMC) data. Savara’s management, however, remains optimistic about ultimately obtaining approval for Molbreevi. They plan to engage with the FDA in a Type A Meeting to clarify the additional data requirements. Notably, the FDA has not requested further efficacy or safety data, which Savara’s management finds reassuring.
Despite the confidence in Molbreevi’s prospects, Guggenheim has adjusted the drug’s probability of success to 90%, down from 95%, and anticipates a delayed market launch around early 2027, a year later than initially expected. These changes, along with other minor model updates, have led to the lowered price target for Savara’s stock.
Savara’s stock experienced a significant drop of approximately 31.7% on the day of the announcement, contrasting with a slight increase in the broader biotech index. The analyst predicts that the stock may not see substantial movement until further details emerge from the upcoming Type A Meeting with the FDA, which is expected to occur in late August. InvestingPro analysis indicates the stock is currently trading in oversold territory, with a relatively low beta of 0.44, suggesting lower volatility compared to the broader market. The company maintains a strong liquidity position with a current ratio of 14.91, indicating robust short-term financial health.
Despite the recent setback and market reaction, Guggenheim’s analysis supports a continued Buy rating for Savara. The firm believes in the potential for long-term value creation, especially considering Molbreevi’s clinical data and the existing unmet medical need for aPAP treatment. InvestingPro analysis suggests the stock is currently undervalued, with additional metrics and insights available in the comprehensive Pro Research Report. The company maintains a "FAIR" overall financial health score, with notably strong cash positions exceeding debt levels on its balance sheet.
In other recent news, Savara Inc. has faced a significant regulatory challenge with the U.S. Food and Drug Administration (FDA), which issued a Refuse to File (RTF) letter for the company’s Biologics License Application (BLA) for Molbreevi. The FDA’s request for additional Chemistry, Manufacturing, and Controls (CMC) data has prompted Savara to plan a resubmission in the fourth quarter of 2025. Meanwhile, Evercore ISI has adjusted its price target for Savara to $2.00, down from $3.00, citing delays in the BLA process. Despite these setbacks, JMP Securities remains optimistic, maintaining a $10.00 price target and a Market Outperform rating, highlighting a 90% probability of success for Molbreevi’s approval.
Savara is also preparing to present data from its Phase 3 clinical trial of molgramostim at medical congresses in Germany and Japan. This investigational treatment aims to improve pulmonary function for patients with autoimmune pulmonary alveolar proteinosis (aPAP). Additionally, Savara has ended its sales agreement with Evercore Group L.L.C., which previously allowed for the sale of up to $100 million in common stock. The termination, effective April 2025, does not incur penalties and reflects a strategic decision in the company’s capital market activities. Investors will be keenly observing Savara’s efforts to address regulatory requirements and its ongoing development of treatments for rare respiratory diseases.
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