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Tuesday, Lucid (NASDAQ:LCID) Capital Markets initiated coverage on Palvella Therapeutics (NASDAQ:PVLA) stock, assigning a Buy rating and setting a price target of $49.00, well above the current trading price of $27.50. According to InvestingPro data, the stock appears overvalued at current levels, despite showing impressive year-to-date returns of 129%. The optimism from the firm is primarily due to the potential of Palvella’s leading drug candidate, QTORIN rapamycin, which is currently undergoing a Phase 3 SELVA trial for the treatment of microcystic lymphatic malformations (MLM).
QTORIN rapamycin stands out as it could become the first FDA-approved therapy for MLM. Phase 2 trials have already shown promising results, with statistically significant and clinically meaningful improvements observed in 12 patients with MLM. These outcomes have strengthened Lucid Capital Markets’ confidence in the success of the ongoing Phase 3 trial.
In addition to the MLM indication, QTORIN rapamycin is also being evaluated for cutaneous venous malformations (CVM) in a separate Phase 2 trial. This expansion into additional skin diseases underscores the drug’s potential versatility. The mechanism of action (MoA) of QTORIN rapamycin as an mTOR inhibitor suggests possible applications in a range of rare genetic skin diseases beyond MLM and CVM.
Looking ahead, Lucid Capital Markets highlighted two upcoming milestones that could significantly impact Palvella Therapeutics’ stock value. The results from the Phase 2 CVM trial are expected in the fourth quarter of 2025, followed by the top-line data from the Phase 3 MLM trial in the first quarter of 2026. These events are considered key inflection points for the company’s stock trajectory.
The firm’s analysts estimate that, with successful development and commercialization, QTORIN rapamycin could achieve risk-adjusted peak sales of over $1 billion across both MLM and CVM indications. This projection underpins their bullish stance on Palvella Therapeutics’ market prospects.
In other recent news, Palvella Therapeutics has reported positive results from its Phase 2 study of QTORIN rapamycin for treating microcystic lymphatic malformations, with all participants experiencing significant improvement over a 12-week period. The trial’s findings, published in the Journal of Vascular Anomalies, highlighted the safety and efficacy of the treatment, which was well-tolerated with no serious adverse events. In addition, Palvella is advancing its Phase 3 SELVA trial, which has received Breakthrough, Fast Track, and Orphan Drug Designations from the FDA, with data anticipated in early 2026. Analyst firms have shown confidence in Palvella’s prospects, with Scotiabank (TSX:BNS) initiating coverage with a Sector Outperform rating and a $50 price target, citing potential growth in market valuation. H.C. Wainwright maintained a Buy rating and a $38 price target, emphasizing the expansion of the SELVA trial to include younger patients, which could enhance treatment duration if approved. Cowen analysts also initiated coverage with a Buy rating and a $44 price target, focusing on the potential of Palvella’s QTORIN formulation platform to address unmet needs in rare genetic skin diseases. The company’s ongoing research and development efforts, particularly in the treatment of Pachyonychia Congenita and cutaneous venous malformations, are seen as pivotal in driving future sales and establishing new standards of care.
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