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Investing.com - UBS has lowered its price target on Harmony Biosciences Holdings Inc. (NASDAQ:HRMY) to $43.00 from $50.00 while maintaining a Buy rating on the stock. The company, currently trading near its 52-week low of $25.95, shows strong financial health with a P/E ratio of 8.67 and impressive revenue growth of 17.74% over the last twelve months, according to InvestingPro data.
The price target reduction follows the recent Phase 3 failure of Zygel for Fragile X Syndrome (FXS) and a rejection for idiopathic hypersomnia (IH) approval, which has limited the company’s growth prospects beyond its current portfolio.
UBS noted that investors are concerned about Harmony’s diminished opportunity to develop into a multi-asset company following these setbacks.
The firm also highlighted potential competitive pressure on Harmony’s base business Wakix in the narcolepsy market, particularly with the possible launch of orexin agonists from competitors.
The new price target is based on an unchanged 2.75x multiple applied to lower 2029 estimated sales of $1.08 billion, down from a previous estimate of $1.34 billion, with UBS completely removing projected Zygel sales from its financial model.
In other recent news, Harmony Biosciences Holdings Inc. announced that its Phase 3 RECONNECT trial for ZYN002, a synthetic transdermal cannabidiol gel, did not meet its primary endpoint for treating Fragile X syndrome. The trial’s failure was attributed to a higher-than-anticipated placebo response, impacting the expected efficacy results. Following this announcement, multiple analyst firms adjusted their price targets for Harmony Biosciences. H.C. Wainwright lowered its price target to $55 while maintaining a Buy rating. Mizuho reduced its price target to $35, maintaining an Outperform rating. Oppenheimer also adjusted its price target to $62 and removed Fragile X syndrome from its financial model for the company. The trial involved 215 patients aged 3 to under 30 years with Fragile X syndrome, a condition with no FDA-approved treatments. Despite the setback, analysts continue to hold positive ratings on the stock, suggesting ongoing interest in Harmony Biosciences’ broader portfolio.
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