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EF Hutton has initiated coverage on Reviva Pharmaceuticals (NASDAQ: RVPH), issuing a Buy rating with a price target of $15.00.
The firm's optimism is primarily driven by the potential of Reviva's leading drug candidate, brilaroxazine, which is being developed for the treatment of Schizophrenia.
Following the announcement of positive Phase 3 data, the company is preparing to file a New Drug Application (NDA) in the first quarter of 2026.
The analyst from EF Hutton highlighted that brilaroxazine could also be beneficial in treating other conditions such as bipolar disorder, depression, and various inflammatory diseases, including psoriasis, idiopathic pulmonary fibrosis (IPF), and pulmonary arterial hypertension (PAH). The breadth of potential applications for brilaroxazine contributes to the firm's valuation target.
In their financial models, EF Hutton has applied a Probability of Success factor of 70% for the schizophrenia indication, recognizing it as the central element in their valuation of Reviva Pharmaceuticals. Additionally, a 30% discount rate was used in the modeling to account for potential risks and uncertainties.
The firm anticipates that Reviva Pharmaceuticals may need to secure additional capital, which has been factored into the projected share count. EF Hutton's valuation employs a combination of Free Cash Flow to the firm (FCFF), discounted EPS (dEPS), and sum-of-the-parts (SOP) models.
In other recent news, Reviva Pharmaceuticals has reported positive results from its Phase 3 RECOVER trial of brilaroxazine for the treatment of schizophrenia, meeting all primary and secondary endpoints.
The company has also been granted U.S. and European patents for brilaroxazine, expanding its intellectual property rights. H.C. Wainwright has given Reviva a Buy rating, although it adjusted its 12-month price target for Reviva from $20 to $14 following an equity offering by the company.
Reviva is planning to develop brilaroxazine for other neuropsychiatric indications and it has received Orphan Drug Designation by the U.S. FDA for certain pulmonary conditions. The company has also secured a European patent for its drug, extending its intellectual property rights for the treatment of pulmonary hypertension and pulmonary arterial hypertension. These are among the recent developments at Reviva Pharmaceuticals.
The company has completed an equity offering that resulted in the sale of approximately 1.9 million shares of common stock. The FDA has accepted Reviva's Phase 3 RECOVER-2 study for brilaroxazine, a potential treatment for schizophrenia, with the trial set to commence soon.
InvestingPro Insights
As Reviva Pharmaceuticals (NASDAQ: RVPH) navigates the path to a potential New Drug Application for brilaroxazine, investors and analysts are closely monitoring the company's financial health and market performance. According to InvestingPro data, Reviva has a market capitalization of approximately $42.36 million, indicating the size and scale of the company in the pharmaceutical sector. Despite the optimism surrounding their leading drug candidate, the company's P/E Ratio stands at -0.98, reflecting investor sentiment about its earnings potential.
Two significant InvestingPro Tips for Reviva Pharmaceuticals include the fact that the company holds more cash than debt on its balance sheet, which can be a positive sign of financial stability. Moreover, two analysts have revised their earnings upwards for the upcoming period, suggesting a growing confidence in the company's financial prospects. On the flip side, Reviva has been noted to suffer from weak gross profit margins and does not pay a dividend to shareholders, which could be points of consideration for income-focused investors.
For those interested in a deeper dive into Reviva Pharmaceuticals' financials and market performance, InvestingPro offers additional insights and metrics, with a total of 12 InvestingPro Tips available on their platform. These include observations on the stock's recent returns, such as a strong return over the last month of 32.07%, and the challenges it faces, like the significant price drop over the last year. To explore these insights further, one can visit InvestingPro's detailed analysis for Reviva Pharmaceuticals.
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