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On Tuesday, Reviva Pharmaceuticals Holdings Inc. (NASDAQ:RVPH), a micro-cap biotech with a market capitalization of $41.6 million, saw its price target significantly reduced by Boral (OTC:BOALY) Capital from $8.00 to $3.00, yet the firm maintained its Buy rating on the stock. Boral Capital’s move reflects heightened concerns over the company’s financial position as it progresses with its lead drug candidate, brilaroxazine. The current analyst consensus remains bullish, with price targets ranging from $5 to $16.
Jason Kolbert of Boral Capital has raised the risk rate for Reviva from 30% to 50% due to the company’s near-term financing uncertainty. According to InvestingPro data, while the company holds more cash than debt on its balance sheet, its current ratio of 0.54 indicates that short-term obligations exceed liquid assets. Despite the potential advancement of brilaroxazine toward a New Drug Application (NDA) filing and the expected launch of the RECOVER-2 trial mid-year, Reviva’s current cash reserves are deemed insufficient to support these critical milestones.Want deeper insights? InvestingPro subscribers have access to over 8 additional key metrics and financial health indicators for Reviva Pharmaceuticals.
Kolbert noted that key data for brilaroxazine is anticipated in the second quarter, which could be pivotal for the drug’s development trajectory. However, until the company secures additional financing, the risk of stock dilution remains high. Boral Capital’s analysis suggests that multiple equity raises may be necessary for Reviva to continue its operations and meet its objectives.
Reviva Pharmaceuticals is focused on developing treatments for central nervous system (CNS) diseases. The adjustment in the price target comes at a time when the company is navigating the challenges of funding its ongoing clinical trials and ensuring sufficient capital to reach its near-term goals.
The lowered price target to $3.00 from the previous $8.00 by Boral Capital is a reflection of the increased financial risk associated with Reviva’s operations, with InvestingPro data showing a weak overall Financial Health Score of 1.57. The stock has declined over 50% year-to-date, though it has shown recent strength with a 6.7% gain in the past week. The firm’s analysts underscore the importance of securing financing to mitigate the high dilution risk and support the company’s drug development plans.
In other recent news, Reviva Pharmaceuticals has seen adjustments in its financial outlook as Benchmark analysts reduced the company’s price target from $17 to $14. This revision is based on the latest financial disclosures, particularly the updated share count in the company’s 10-K filing. Despite the lowered price target, Benchmark maintains a Speculative Buy rating, indicating a positive outlook on the stock’s potential. Reviva Pharmaceuticals ended the quarter with $13.5 million in cash reserves, though it may seek additional funding to advance its clinical programs. The company is expected to pursue partnership and licensing opportunities to secure the necessary capital. Analysts from Benchmark noted that Brilaroxazine, intended for treating schizophrenia, shows promise with potential advantages such as better efficacy and fewer side effects compared to existing treatments. Upcoming milestones for the company include the release of the full dataset from the ongoing OLE trial in 2025 and the initiation of the RECOVER-2 trial in mid-2025. The submission of the New Drug Application for Brilaroxazine is scheduled for the fourth quarter of 2026.
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