Palvella Therapeutics stock gains attention with Phase 3 trial data expected in early 2026

Thursday, H.C. Wainwright initiated coverage on Palvella Therapeutics (NASDAQ:PVLA) with a Buy rating and a price target of $38.00, representing significant upside potential from the current price of $11.68. According to InvestingPro data, analysts maintain a Strong Buy consensus on the stock, with a median price target of $30.00. The firm highlighted Palvella's development of QTORIN 3.9% rapamycin anhydrous gel, a treatment for rare genetic skin diseases, as a key factor in their rating.

Palvella Therapeutics, a late clinical-stage biopharmaceutical company, is currently working on novel therapies for rare, genetic skin diseases such as microcystic lymphatic malformations (mLMs) and cutaneous venous malformations (cVMs). Both conditions lack FDA-approved treatments, presenting a significant unmet medical need. InvestingPro analysis reveals the company maintains a strong financial health score of 2.76, with a healthy current ratio of 3.49, indicating solid short-term liquidity to support its development programs.

The analysts at H.C. Wainwright believe that QTORIN rapamycin's unique formulation as a topical anhydrous gel, which is shelf-stable and contains a high dose of the drug, overcomes the limitations of other rapamycin formulations. They note that other forms of rapamycin, both oral and topical, face barriers such as systemic toxicity, immunosuppressive activity, and poor skin distribution or penetration.

The firm expects that QTORIN rapamycin will provide a safe, effective, and manageable treatment option for patients with these lifelong dermatological diseases. They anticipate a potential market launch for the treatment of mLMs in 2027 and for cVMs in 2029. The Phase 3 trial data for mLMs is expected in the first quarter of 2026.

H.C. Wainwright's analysts project that QTORIN rapamycin could generate sales of $80.4 million in 2029, with the potential to increase to $381 million by 2034. This optimistic sales forecast underpins their decision to initiate coverage with a Buy rating and a $38 price target for Palvella Therapeutics stock. While the stock has seen some pressure in the near term, declining about 8% over the past six months, InvestingPro subscribers can access additional insights, including 7 more ProTips and detailed financial metrics to make more informed investment decisions.

In other recent news, Pieris Pharmaceuticals (NASDAQ:PVLA) announced updates on its board changes and ongoing merger with Palvella Therapeutics. The company's 2024 Annual Meeting resulted in Chris Kiritsy and Peter Kiener, D.Phil. being elected, with a significant majority of votes. The planned merger with Palvella Therapeutics continues to progress, with Palvella slated to become a wholly owned subsidiary of Pieris upon completion.

Despite a 97% revenue decline over the past year, Pieris maintains a strong liquidity position, which is a key factor for investors. In response to demands from stockholders and two lawsuits for additional information regarding the merger, Pieris provided supplemental disclosures, including updated financial projections for Palvella through 2038.

These are among the recent developments at Pieris Pharmaceuticals. The company has also clarified director compensation related to the Transaction (JO:TCPJ) Committee, which was formed to evaluate potential strategic transactions and dissolved recently. While the company holds more cash than debt, it is rapidly using up its reserves, a crucial consideration for investors monitoring the merger.

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