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On Wednesday, RBC Capital Markets adjusted its outlook on Adverum Biotechnologies (NASDAQ:ADVM) stock, reducing the price target to $5.00 from the previous $10.00, while keeping a Sector Perform rating on the shares. The stock, currently trading near its 52-week low of $3.07, has seen a significant decline of over 72% in the past year. The adjustment follows Adverum’s announcement of its fourth-quarter 2024 results and provided updates on its upcoming clinical trials for wet age-related macular degeneration (wAMD). According to InvestingPro data, five analysts have recently revised their earnings expectations downward for the upcoming period.
Adverum is making headway with its wAMD pivotal studies, with the first U.S.-based study having begun last month, slightly ahead of its competitor FDMT. This study launch fell within the first half of 2025 guidance. Additionally, the company outlined timelines for a global wAMD pivotal study expected to start in the second half of 2025 and a two-year follow-up from the LUNA study readout scheduled for the fourth quarter of 2025. InvestingPro analysis indicates the company is currently undervalued, though investors should note that analysts anticipate continued sales decline in the current year.
The analyst at RBC Capital, Lisa Walter, noted that recent data indicates that reducing the dosage and increasing steroid exposure could improve the therapeutic index. However, Adverum’s past issues with inflammation and hypotony in its DME study and some late inflammation in the OPTIC study, combined with a competitive market landscape, warrant a cautious stance. The competition not only comes from within the same class, such as FDMT, but also from long-acting TKIs, which are outside of the class.
The financial aspect also plays a role in the revised price target. Adverum is expected to have a financial overhang, with $126 million in funds projected to last into the second half of 2025. InvestingPro analysis reveals the company is quickly burning through cash, though it maintains more cash than debt on its balance sheet, with a current ratio of 5.82. The increased operational expenses (OpEx) have influenced the decision to lower the price target. For deeper insights into Adverum’s financial health and detailed analysis, investors can access the comprehensive Pro Research Report, available exclusively on InvestingPro.
Walter’s comments reflect a watchful approach as RBC Capital awaits further development that could mitigate the risks associated with Adverum’s clinical and financial challenges. The new price target of $5.00 is set with these considerations in mind.
In other recent news, Adverum Biotechnologies has launched the ARTEMIS Phase 3 study to assess the efficacy and safety of its gene therapy candidate, Ixo-vec, for treating wet age-related macular degeneration (AMD (NASDAQ:AMD)). This pivotal trial is significant as it represents the first registrational intravitreal gene therapy trial for wet AMD, targeting both treatment-naïve and previously treated patients. The study will involve approximately 284 U.S.-based patients, comparing a single administration of Ixo-vec with the standard of care, aflibercept, administered every eight weeks. The primary goal is to determine if Ixo-vec is non-inferior to aflibercept in improving best corrected visual acuity (BCVA) after one year.
Oppenheimer has maintained an Outperform rating on Adverum, with a $32 price target, expressing confidence in the success of the Phase 3 ARTEMIS study. The firm cites significant one-year efficacy and safety data from the Phase 2 LUNA study as a basis for this confidence. The ARTEMIS trial aims to generate data necessary for regulatory approval, potentially establishing Ixo-vec as a transformative treatment for wet AMD patients. The therapy has received Fast Track and Regenerative Medicine Advanced Therapy (RMAT) designations from the FDA, among other recognitions. These developments highlight Adverum’s commitment to advancing gene therapy as a potential new standard of care for ocular diseases.
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