UroGen Pharma stock rating upgraded to buy by H.C. Wainwright

H.C. Wainwright upgraded UroGen Pharma (NASDAQ:URGN) from neutral to buy with a price target of $50.00 following FDA approval of the company’s bladder cancer treatment. The upgrade came after UroGen announced the FDA approval of ZUSDURI last week, catalyzing an impressive 71% stock surge over the past week. According to InvestingPro data, analyst targets now range from $16 to $47, reflecting growing optimism about the company’s prospects.

ZUSDURI is the first and only FDA-approved medication for adults with recurrent low-grade, intermediate-risk non-muscle-invasive bladder cancer. The treatment uses mitomycin C formulated with a sterile hydrogel, utilizing UroGen’s proprietary sustained release RTGel technology designed for tumor ablation. InvestingPro analysis reveals the company maintains impressive gross profit margins of nearly 90%, though it’s currently not profitable with an EBITDA of -$106.6M in the last twelve months.

The FDA approval was based on results from the Phase 3 ENVISION trial, which showed ZUSDURI delivered a 78% complete response rate for patients at three months, with 79% of those patients remaining event-free 12 months later. This provides an alternative to the current standard treatment of transurethral resection of bladder tumor, a surgical procedure typically performed under general anesthesia. The company’s strong liquidity position, with cash exceeding debt and a current ratio of 5.65, provides financial flexibility to support the treatment’s commercial launch.

The most common adverse reactions included increased creatinine, increased potassium, dysuria, decreased hemoglobin, increased liver enzymes, increased eosinophils, decreased lymphocytes, urinary tract infection, decreased neutrophils, and hematuria. Serious adverse reactions occurred in 12% of treated patients.

The approval represents a positive surprise following last month’s negative Oncologic Drugs Advisory Committee panel vote, which narrowly decided by a 5-4 margin that the risk-benefit profile of UGN-102 was not favorable enough to support use in this indication.

In other recent news, UroGen Pharma announced that the U.S. Food and Drug Administration (FDA) has approved ZUSDURI™, a treatment for recurrent low-grade, intermediate-risk non-muscle invasive bladder cancer. This approval follows the completion of the Phase 3 ENVISION trial, which demonstrated a 78% complete response rate at three months. Despite a previous negative advisory committee vote, the FDA’s decision was unexpected and has led to significant attention from analysts. Oppenheimer, Guggenheim, and Scotiabank (TSX:BNS) all raised their price targets for UroGen Pharma, with the new targets set at $31, $30, and $47, respectively, reflecting optimism about the drug’s market potential.

ZUSDURI is expected to be available in the U.S. starting July 1, 2025, and is projected by analysts to potentially achieve up to $1 billion in sales. Guggenheim has increased its probability of success for the drug to 100%, highlighting the broad indication approval without the need for additional large trials. Scotiabank noted the FDA’s positive view of the drug’s benefit/risk profile, which aligns with supportive feedback from urologists. The approval marks a significant commercial and clinical milestone for UroGen, with analysts projecting ZUSDURI to become a new standard in bladder cancer care. The company plans to continue the ongoing ENVISION trial to further assess the treatment’s benefits.

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