Trevena Inc (TRVN): Olinvo Remains Commercially Viable

Trevena Inc (NASDAQ:TRVN) shares collapsed today, falling nearly 40%, after the pharmaceutical company reported that both Phase 3 oliceridine (Olinvo) trials in post-surgical pain met primary endpoint of reduction in pain relative to placebo. However, although a clear pattern of improved safety and tolerability profile is evident in relation to morphine, most assessments did not reach statistical significance.

In reaction, Oppenheimer analyst Derek Archila reduced the price target to $10.00 (from $13.00), while reiterating an Outperform rating on Trevena shares.

Archila commented, “While we believe the data will support Olinvo’s FDA approval with a broad label, in our view, Olinvo’s efficacy and safety data relative to morphine has left investors questioning Olinvo’s potential “marketing hook” since the comparative data were mixed. We think the sell-off is warranted to some degree as it is unlikely Olinvo will be able to gain any favorable comparative claims to morphine in the drug’s label. However, we still believe Olinvo is commercially viable and will be able to serve as an important treatment option, particularly for patients at high risk of opioid-related AEs.”

“While we increase our probability of success (POS) to 90% (from 75%) as we believe Olinvo will receive approval, we lower our peak sales estimate to ~$315M (from ~$400M) in order to be more conservative based on today’s results. This is in line with other acute pain management drugs (i.e., Exparel, Ofirmev),” the analyst concluded.

According to TipRanks, which measures analysts’ and bloggers’ success rate based on how their calls perform, analyst Derek Archila has a yearly average return of 4.8% and a 73% success rate. Archila has a 13.3% average return when recommending TRVN, and is ranked #2167 out of 4490 analysts.

As of this writing, all the 12 analysts polled in the past 12 months rate Trevena stock a Buy. With a return potential of 222.5%, the stock’s consensus target price stands at $13.77.

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