On Friday, Mizuho (NYSE:MFG) Securities adjusted its financial outlook for Adverum Biotechnologies (NASDAQ:ADVM), a biotech firm specializing in gene therapies for ocular diseases. The firm's analyst reduced the price target on the company's shares to $16.00 from the previous $20.00 while maintaining an Outperform rating.
The adjustment follows Adverum's recent announcement of study data for ixo-vec, its leading gene therapy candidate for the treatment of wet age-related macular degeneration (wAMD). The company shared results from its 4-year Phase 1 OPTIC study and 52-week Phase 2 LUNA study, which the analyst described as "very robust on both safety and efficacy."
The new data has led Mizuho to increase its peak sales estimate in the United States, European Union 5, and Japan by approximately 45% to $2.6 billion, up from the prior estimate of $1.8 billion. Despite this optimistic sales projection, the firm has adjusted its expectations regarding Adverum's partnership strategy for ixo-vec. Previously anticipating an ex-US partnership, Mizuho now expects a global partnership due to the disclosed size and assumed cost of the upcoming Phase 3 study, as well as Adverum's current cash position.
This change in partnership assumption has impacted the way Mizuho predicts revenue and costs will affect Adverum's profit and loss statement. As a result, the price target has been lowered to $16.00. Nonetheless, Mizuho's analyst reaffirmed a positive outlook on ixo-vec's potential and the current risk/reward profile, leading to the decision to maintain the Outperform rating on Adverum's stock.
In other recent news, Adverum Biotechnologies has reported promising results from its LUNA Phase 2 trial and the long-term OPTIC study for its gene therapy, Ixo-vec, aimed at treating age-related macular degeneration. The LUNA trial demonstrated significant reductions in treatment burden, with the 6E10 and 2E11 doses of Ixo-vec showing an 88% and 92% reduction in mean annualized anti-VEGF injections respectively. The company plans to advance the 6E10 dose into two Phase 3 registrational studies, with the initial ARTEMIS study expected to begin in 2025.
Adverum Biotechnologies has also recently appointed Jason L. Mitchell as its new Chief Commercial Officer, a move expected to enhance Ixo-vec's launch and commercialization. The company's second quarter financial results for 2024 were strong, with earnings per share of ($0.89) surpassing both firm and consensus estimates.
Analyst firms H.C. Wainwright, RBC Capital Markets, Oppenheimer, Mizuho Securities, and Truist Securities have provided their outlook on Adverum. H.C. Wainwright maintained its Buy rating and $30.00 price target, while RBC Capital Markets adjusted its price target to $10.00 from the previous $12.00.
Oppenheimer kept its Outperform rating with a $28.00 price target, Mizuho Securities reduced its target to $20.00, and Truist Securities revised its target from $60.00 to $40.00.
InvestingPro Insights
Recent InvestingPro data provides additional context to Adverum Biotechnologies' (NASDAQ:ADVM) financial situation and market performance. Despite Mizuho's optimistic outlook on ixo-vec's potential, the company's current financials reflect the challenges typical of biotech firms in the development stage.
InvestingPro data shows that Adverum's market capitalization stands at $126.06 million, with a revenue of just $1 million in the last twelve months as of Q3 2024. This low revenue figure aligns with the company's pre-commercial stage and explains the high revenue valuation multiple mentioned in the InvestingPro Tips.
Two relevant InvestingPro Tips highlight that Adverum "holds more cash than debt on its balance sheet" and that "liquid assets exceed short term obligations." These factors could be crucial for the company's ability to fund the upcoming Phase 3 study for ixo-vec, which Mizuho analysts noted as a consideration in their partnership strategy expectations.
The stock's recent performance has been challenging, with InvestingPro data showing a 1-month price total return of -29.36% and a 1-year return of -31.56%. This aligns with the InvestingPro Tip that the stock is "trading near 52-week low," which investors should consider in light of Mizuho's maintained Outperform rating.
For readers seeking a more comprehensive analysis, InvestingPro offers 13 additional tips for Adverum Biotechnologies, providing a deeper understanding of the company's financial health and market position.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.