Every month brings plenty of catalysts for several biotech stocks. October is no exception. There are quite a few regulatory news to be announced next month. One biotech in particular could enjoy boosts to its stock if all goes well — Trevena (NASDAQ:TRVN).
Trevena could be on track to win FDA approval for its lead candidate oliceridine, a potential treatment for moderate to severe acute pain. But the first hurdle is an FDA advisory committee meeting scheduled for October 11 to discuss the NDA for oliceridine, which has a November 2 PDUFA date. While the advisory committee’s vote doesn’t automatically mean the FDA will decide on oliceridine in the same way, it should be a pretty good predictor. Historically, the FDA goes along with the advisory committee recommendation close to 90% of the time. Because of this high correlation, a positive recommendation by the advisory committee should result in a nice bump for Trevena stock.
JMP analyst Jason Butler commented, “An AdComm has always been expected for the NDA, and we view the timing as consistent with expectations. We expect some debate at the meeting regarding the appropriate balance between ensuring patients’ medical pain management needs are met while avoiding misuse. Given that oliceridine will be used in a controlled procedural setting, and there are no robust data supporting the use of opioids in the hospital with the risk of misuse in the community setting – we believe patients whose pain is well controlled on discharge are less likely to abuse pain control medicines in the community setting – we think the panel will support approval. Furthermore, we continue to believe that the Phase 2/3 trials for oliceridine support that it is a novel, differentiated opioid with more favorable respiratory and GI safety.”
As such, Butler reiterates a Buy rating on TRVN with a $15 price target (the highest on Wall Street), which implies a huge upside of over 800% from Tuesday’s closing price. (To watch Butler’s track record, click here)
Echoing Butler’s bullish views is Cowen’s Ritu Baral: “We expect a positive outcome from the panel and anticipate approval on the PDUFA with a broad label. We anticipate a significant point of discussion of the panel will be the differentiated safety profile of oliceridine, particularly strong trends in the phase 3 dataset that suggest improved respiratory safety (as well as stat sig improvements in GI tolerability). We think positive discussions and conclusions from the panel could be a major driver for TRVN shares.”
As a sign of confidence in Trevena, Baral maintains an Outperform rating on the stock with a price target of $10.00. Baral is one of the top analysts on Wall Street covering the Biotechnology sector. Her picks average a 30.8% one-year return, and she’s ranked #56 out of 4,874 analysts, according to TipRanks.
Net net, when it comes to Wall Street’s bet, the odds are on this small-cap biotech stock. Based on seven analysts polled in the last 12 months, six are bullish on TRVN, while one remains sidelined. The 12-month consensus mean price target for the stock is $8.58, reflecting a 420% upside from current levels.