United Therapeutics stock maintains Buy rating at UBS on IPF opportunity

Investing.com - UBS has reiterated a Buy rating and $560.00 price target on United Therapeutics Corp. (NASDAQ:UTHR), currently trading at $398.15, following positive TETON-2 trial results. The company demonstrates excellent financial health with an impressive gross margin of 89% and trades at an attractive P/E ratio of 14.4x.

The stock reacted favorably to the positive results, though UBS notes some investors had expected stronger performance. The investment firm believes the IPF (idiopathic pulmonary fibrosis) study results revealed a potential $3-4 billion peak sales opportunity that was largely unanticipated by the market. According to InvestingPro, UTHR has demonstrated strong momentum with a 30% return over the past six months.

Some investors remain divided on the IPF opportunity due to potential competition from Insmed or Liquidia, which could be affecting market perception of Tyvaso’s commercial potential in this indication.

UBS expects UTHR stock to continue rising as the story attracts more long-only investor interest from those wanting exposure to the IPF launch and further risk reduction.

The firm identified potential near-term upside catalysts including detailed TETON-2 data and legal updates regarding the ’327 ILD patent.

In other recent news, United Therapeutics has reported significant developments related to its Tyvaso drug for idiopathic pulmonary fibrosis (IPF). The company announced that its TETON-2 pivotal study met its primary efficacy endpoint, demonstrating a statistically significant improvement in forced vital capacity (FVC) by 95.6 mL compared to placebo. This positive outcome has led several analyst firms to raise their price targets for United Therapeutics. Cantor Fitzgerald increased its price target to $525, citing a 90% probability of success for Tyvaso. H.C. Wainwright also raised its target to $500, estimating a 75% probability of approval and adjusted peak sales of $5.8 billion. UBS set its new target at $560, noting the Phase 3 trial results surprised many investors and analysts. Jefferies raised its target to $564, highlighting the clinically meaningful improvement in FVC at week 52. These developments reflect a strong response from the analyst community following the successful trial results.

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