Jones Trading sets Palvella stock Buy rating, $45 target

On Monday, Jones Trading initiated coverage on Palvella Therapeutics, which is traded on NASDAQ under the ticker PVLA, with a Buy rating and a price target of $45. The stock has shown remarkable momentum, surging 119% over the past six months and currently trading near its 52-week high of $29.27. According to InvestingPro analysis, the stock appears overvalued at current levels. The new coverage comes as Palvella Therapeutics focuses on developing treatments for rare dermatological conditions through its QTORIN platform, which enhances drug delivery to the skin.

Palvella’s lead product is a topical re-formulation of sirolimus, aimed at treating mTOR-driven disorders such as microcystic lymphatic malformations (micro LMs) and venous malformations (VMs). Jones Trading’s analyst praised Palvella’s approach to micro LMs, highlighting the validity of mTOR inhibition in this indication. The company maintains a strong financial position, with InvestingPro data showing a healthy current ratio of 2.14 and liquid assets exceeding short-term obligations. The analyst noted the limitations of systemic sirolimus due to its unnecessary toxicity and the variability of compounded topical sirolimus formulations, which are significantly less concentrated than Palvella’s QTORIN-based product.

The ongoing Phase 3 clinical trial for Palvella’s product is noted to be substantially similar to the Phase 2 trial, which achieved statistically significant results on the clinical global impression scale (CGI-I). The potential for an accelerated New Drug Application (NDA) submission is also mentioned, thanks to the 505(b)(2) abbreviated approval pathway and priority review.

Looking ahead, Jones Trading anticipates that Phase 3 data will be available in the first quarter of 2026, with the possibility of FDA approval following in the second half of 2026 or in 2027. The initiation of coverage with a Buy rating and a price target of $45 aligns with the broader analyst consensus, with targets ranging from $30 to $50. InvestingPro subscribers can access 12 additional key insights about PVLA’s financial health and market position, which currently rates as GREAT according to InvestingPro’s comprehensive scoring system.

In other recent news, Palvella Therapeutics has been in the spotlight following the release of positive results from its Phase 2 study of QTORIN rapamycin for treating microcystic lymphatic malformations. The study, published in the Journal of Vascular Anomalies, showed significant improvements in all participants after a 12-week treatment period, with no serious adverse events reported. This development has garnered attention from several analyst firms. Lucid (NASDAQ:LCID) Capital Markets initiated coverage with a Buy rating and a $49 price target, citing the drug’s potential as the first FDA-approved therapy for this condition. Scotiabank (TSX:BNS) also began coverage, assigning a Sector Outperform rating and a $50 target, highlighting pivotal trial readouts as critical milestones for the company. H.C. Wainwright maintained its Buy rating with a $38 target, noting the inclusion of younger patients in the Phase 3 SELVA trial. Additionally, TD Cowen initiated coverage with a Buy rating and a $44 target, emphasizing the potential of Palvella’s QTORIN formulation platform. These recent developments underscore the growing optimism about Palvella Therapeutics’ market prospects.

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