2023-07-06 12:51:46 ET
TD Cowen initiated coverage of Reata Pharmaceuticals ( NASDAQ: RETA ) with an outperform rating, citing the revenue potential of the company's recently approved drug Skyclarys for the treatment of the ultra-rare disease Friedrich's ataxia, or FA.
The investment bank said in a note that it sees sales of Skylarys hitting more than $2B, which would suggest "meaningful upside" to the stock. It added that its estimate of peak global sales of $2.5B by 2035 "may be conservative" and set a price target of $140 for the stock.
TD Cowen said key opinion leaders see healthcare providers receiving around 1,000 start forms for the drug by late summer and 2,000 by early 2024. Eventually, they see the drug being prescribed for all eligible patients, which would be around 4,500 adults.
The bank also said it expects the drug to be similarly approved in the EU, with an anticipated launch in Q2 2024. It also sees possible US approval for pediatric use in the 2025-2026 timeframe. It noted that children account for around 10% of all FA patients.
"Ultimately, we believe Skyclarys should see widespread use, prolonged duration of treatment, and be one of the better launches over the next few years," the analysts added.
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TD Cowen starts Reata at outperform, cites sales potential of ataxia drug