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Investing.com - Jefferies initiated coverage on Stoke Therapeutics (NASDAQ:STOK), currently trading at $12.35 with a market capitalization of $674 million, with a Buy rating and a $30.00 price target. According to InvestingPro data, the company maintains an excellent financial health score, with more cash than debt on its balance sheet.
The investment firm cited favorable risk-reward ahead of Phase III clinical trial data for zorevunersen, the company’s treatment for Dravet syndrome, a rare pediatric epilepsy. The pivotal trial results are expected in the second half of 2027. The company’s strong liquidity position, with a current ratio of 8.41, suggests it is well-positioned to fund its clinical development programs.
Jefferies estimates a 40-50% chance that the trial will produce differentiated efficacy results, potentially opening a market opportunity worth $1-1.5 billion or more. The firm noted that peak sales could reach $3-4 billion if the drug demonstrates "clearly profound" efficacy.
The U.S. Food and Drug Administration has already awarded zorevunersen (also known as STK-001) with breakthrough therapy designation for treating Dravet syndrome. Jefferies highlighted that investors can expect a potential material update from an FDA meeting in the second half of 2025.
According to Jefferies, Phase I/II open-label data suggests zorevunersen can reduce seizures by month six of treatment and improve cognitive and behavioral measures by month nine, indicating disease-modifying potential for a condition that severely limits neurodevelopment in patients. With an overall analyst consensus of "Strong Buy" and multiple positive indicators identified by InvestingPro, including strong recent price momentum, investors may want to consider this opportunity.
In other recent news, Stoke Therapeutics has maintained a Buy rating from H.C. Wainwright, which also adjusted its price target for the company to $35, down from $47. This adjustment follows the announcement that the Phase 3 EMPEROR trial for zorevunersen is anticipated to begin in the second quarter of 2025. The trial aims to validate data from an Open Label Extension study, indicating that zorevunersen could become a first-in-class therapy for Dravet syndrome. Recent analyses show that the treatment not only reduces seizure frequency significantly but also positively impacts behavior and cognition. These improvements were noted in several core domains, such as communication and personal skills, compared to stagnation in a matched cohort. H.C. Wainwright highlighted the potential for these findings to be included on the drug’s label if replicated in Phase 3 trials. The firm emphasized that these data are encouraging for future trial outcomes and commercialization. Analyst Andrew Fein revised the valuation model, adjusting price-to-earnings multiples and discount rates in response to current market conditions.
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