BLU - RBC Capital Markets reiterates outperform rating ups price target on BELLUS Health

Shares of BELLUS Health ( NASDAQ: BLU ) have added 5.2% to $10.17 in afternoon trading and, if the gains hold, the stock is on track to post a second straight positive session .

The Canadian biotech on Tuesday outlined its plans for the phase 3 development of its cough treatment candidate BLU-5937 following an end-of-phase 2 (EOP2) meeting with the U.S. FDA.

BELLUS ( BLU ) said it would conduct two pivotal trials - the CALM-1 and CALM-2 studies - which will be designed to evaluate the efficacy, safety and tolerability of BLU-5937 in nearly 675 adult patients.

RBC Capital Markets on Tuesday reiterated its outperform rating on the stock while raising the price target by $5 to $19, which is nearly double BLU's last closing price of $9.67.

"The EOP2 takeaways further bolster our confidence in the BLU-5937 program, and we update our model accordingly," said Renza.

If BLU-5937's approval is successful, Renza estimates revenues as early as 2026 with more than $1.4B peak sales potential.

BLU on Tuesday also said it expects to initiate the phase 3 trial in Q4, and expects data from the CALM-1 trial in H2 2024, a readout timeline which Renza said was in-line with expectations.

RBC Capital Markets' outperform rating compares to a Wall Street average rating of strong buy and a Quant rating of hold.

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