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On Thursday, H.C. Wainwright adjusted its stance on Savara Inc. (NASDAQ:SVRA), downgrading the biopharmaceutical company’s stock rating from Buy to Neutral and setting a price target of $2.00. The downgrade stems from concerns over the company’s communication with investors and its interactions with the Food and Drug Administration (FDA). The stock, which InvestingPro data shows has fallen over 27% in the past week, appears undervalued according to Fair Value analysis, despite its current challenges.
Savara, which is working on developing treatments for rare respiratory diseases, has not instilled confidence in its ability to avoid repeating past mistakes, according to H.C. Wainwright. The firm’s analyst pointed out that while Savara’s drug Molbreevi received Breakthrough Therapy Designation in 2019, the company has since received a Refusal to File letter from the FDA. InvestingPro analysis reveals that while the company maintains a strong liquidity position with a current ratio of 14.91 and more cash than debt on its balance sheet, it’s quickly burning through its cash reserves.
The analyst expressed disappointment in the lack of a clear and straightforward path forward communicated by Savara’s management, especially given the drug’s designation and the ongoing discussions with the FDA. Such a designation typically indicates a more interactive and positive dialogue with the agency, which should not lead to filing refusals.
H.C. Wainwright’s decision to downgrade Savara’s stock reflects the uncertainty surrounding the regulatory path and the market opportunity for Molbreevi. The firm has stated that it can no longer recommend SVRA shares to investors until there is more clarity on these issues.
The downgrade and the revised price target of $2.00, down from the previous target, come as a response to the current situation and the firm’s assessment of Savara’s ability to recover from regulatory setbacks. H.C. Wainwright has expressed hope that clarity will emerge over time regarding both the regulatory journey and the potential for Molbreevi in the market. The company’s financial health score remains weak according to InvestingPro metrics, with negative earnings of $0.49 per share over the last twelve months.
In other recent news, Savara Inc. is navigating several developments concerning its proposed treatment for autoimmune pulmonary alveolar proteinosis (aPAP), Molbreevi. The U.S. Food and Drug Administration (FDA) issued a Refusal to File (RTF) letter for Savara’s Biologics License Application (BLA) due to incomplete Chemistry, Manufacturing, and Controls (CMC) data, though no additional efficacy or safety data was requested. Guggenheim analyst Daniel Krizay has adjusted Savara’s stock price target to $8.00 from $9.00, maintaining a Buy rating, while Evercore ISI lowered its target to $2.00 from $3.00, keeping an In Line rating. Despite these challenges, Savara plans to resubmit the BLA in the fourth quarter of 2025, potentially leading to a Prescription Drug User Fee Act (PDUFA) date in 2026.
JMP Securities has maintained its Market Outperform rating on Savara with a $10.00 price target, expressing confidence in Molbreevi’s approval and commercial prospects. Savara is also preparing to present Phase 3 trial data for Molbreevi at medical congresses in Germany and Japan, highlighting its potential to improve pulmonary function and quality of life for aPAP patients. The company is actively addressing the FDA’s requests and is optimistic about engaging in a Type A Meeting to discuss the RTF. Savara’s management remains committed to overcoming regulatory hurdles and advancing its pipeline of therapies for rare respiratory diseases.
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