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On Thursday, Wells Fargo reiterated its Equal Weight rating and a $9.00 price target on shares of Travere Therapeutics (NASDAQ:TVTX). The firm's analysis followed discussions from the PARASOL workgroup, which concluded that the estimated Glomerular Filtration Rate (eGFR) is not a viable endpoint for Focal Segmental Glomerulosclerosis (FSGS) studies. Instead, the committee's findings indicated potential partial remission benchmarks that could be considered for future study endpoints.
The focus of the PARASOL analysis was the correlation between reductions in urine protein-to-creatinine ratio (UPCR) at 1 year to thresholds of 1.5g/g and 0.7g/g and the longer-term benefit to kidney function. The data reviewed did not include sparsentan, Travere's investigational drug. The key discussions revolved around the appropriate UPCR threshold for predicting renal benefit, with the analysis suggesting 0.7g/g as a more robust predictor.
Travere Therapeutics has reported statistically significant reductions in UPCR down to a 0.5g/g threshold when compared to irbesartan, a current standard of care, and is confident in meeting these benchmarks. Moreover, the company highlighted that a greater proportion of patients achieved proteinuria thresholds below 0.5g/g in Phase 3 trials. Observational extension (OLE) data from Phase 2 trials also showed trends indicating kidney function benefits in patients who reached below 1.5g/g within 9 months.
As a result of the PARASOL outcomes, Travere views the situation positively and plans to reengage with the U.S. Food and Drug Administration (FDA) to discuss potential submissions. While the company did not specify a timeline for this meeting, it anticipates approaching the European Medicines Agency (EMA) contingent on favorable feedback from the FDA. The EMA representatives did not express clear opinions during the PARASOL meeting.
Travere's management is preparing for the next steps in regulatory discussions, emphasizing the importance of these findings for the future of their clinical programs and potential treatment options for FSGS.
In other recent news, Travere Therapeutics witnessed several significant developments. The company's earnings and revenue information reveal that Filspari, a drug by Travere, received full FDA approval for the treatment of adult patients with primary Immunoglobulin A nephropathy, leading to a 37% sales increase to $27.1 million in the second quarter of 2024. The company also reported a robust financial position, with $325.4 million in cash and securities, expected to support its operations into 2028.
However, Travere announced a temporary pause in patient enrollment for the Phase III HARMONY study of pegtibatinase, a treatment for Homocystinuria (HCU), due to a technical issue identified during the manufacturing scale-up process. This pause is expected to delay the HCU program by two years, pushing the projected introduction of pegtibatinase in the U.S. and European markets to 2029 and 2030, respectively.
In response to these developments, multiple analyst firms including Stifel, Canaccord Genuity, Citi, and H.C. Wainwright have adjusted their price targets for Travere, maintaining their ratings. Notably, Stifel increased the price target to $13.00 from the previous $10.00, reflecting the ongoing developments and regulatory interactions that could influence Travere's market position and the future of its product pipeline.
Meanwhile, Barclays increased Travere's stock price target, maintaining an Overweight rating, due to anticipated positive regulatory developments that could enhance U.S. peak sales potential by over $300 million.
InvestingPro Insights
Travere Therapeutics' (NASDAQ:TVTX) recent developments in FSGS studies are reflected in its market performance. According to InvestingPro data, the company has seen a significant 163.72% price return over the last six months, with a 28.86% return in just the past week. This surge has brought the stock price to 98.99% of its 52-week high, trading at $17.59 as of the last close.
Despite these positive price movements, InvestingPro Tips highlight that Travere is quickly burning through cash and is not profitable over the last twelve months. The company's revenue growth of 47.42% in the last twelve months as of Q2 2024 is impressive, but it's coupled with a concerning gross profit margin of -31.44% for the same period.
These metrics underscore the importance of the PARASOL workgroup's findings and Travere's potential reengagement with the FDA. A successful regulatory outcome could be crucial for the company's financial future. For investors seeking a more comprehensive analysis, InvestingPro offers 15 additional tips for Travere Therapeutics, providing a deeper understanding of the company's financial health and market position.
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