HCW starts Savara at buy; PT $22

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H.C. Wainwright initiated coverage of Savara (NASDAQ:SVRA) with a “buy” rating and $22 price target. The stock closed at $8.88 on May 25.

Savara is developing two compounds, Molgradex, and AeroVanc that we believe, are largely de-risked, with well-known PK, safety and toxicological profiles.

“Although both compounds have been identified and developed in different manners, both have one very strong similarity that, in our opinion, supports ongoing development; namely, both drugs have been used off-label as the primary pharmacotherapy to treat their respective indications,” writes analyst Andrew Fein.

Specifically, Molgradex is in Phase 3 studies, for pulmonary alveolar proteinosis; and AeroVanc is in Phase 3, for methicillin-resistant Staphylococcus aureus in cystic fibrosis.

Mr. Fein said that in October 2017, Savara announced plans to expand the indication for Molgradex to include non-tuberculosis mycobacterium (NTM). “Based on our diligence, we elect not to ascribe value to the company’s NTM program at this time. If we were to assume even a 25% probability of success for Savara’s NTM program, our price target would shift upwards to $31, he added.”

Stephen Kilmer