Savara (NASDAQ:SVRA), a biotech focused on respiratory disorders, added ~7% pre-market Tuesday after Jefferies upgraded its shares to Buy from Hold citing over 100% upside in the event of a positive Phase 3 readout from its lead program molgramostim.
The once-daily inhaled formulation is currently undergoing a pivotal Phase 3 trial called IMPALA-2 for the rare lung disorder autoimmune pulmonary alveolar proteinosis (aPAP).
Jefferies analyst Andrew Tsai argues that despite a previous Phase 3 setback, the FDA has awarded its vital Breakthrough Therapy Designation to molgramostim, a recombinant form of human granulocyte-macrophage colony-stimulating factor (GM-CSF).
With its Q1 update, Savara (SVRA) said that IMPALA-2 is on track for full enrollment in June ahead of a topline readout in Q2 2024, which, if positive, could generate more than 100% upside for SVRA, according to Tsai.
The analyst who raises the price target on SVRA to $4 from $2 per share sees a 60% – 65% probability that the drug can yield positive results from this new pivotal study and projects a downside of 60% – 80% in the event of a negative outcome.