On Thursday, RBC Capital Markets updated its financial model for Pharming Group NV (PHARM:NA) stock, resulting in a higher price target for the biopharmaceutical company's shares. The firm's analyst has increased the target to €2.15, up from the previous €1.60, while maintaining an Outperform rating on the stock.
The revision reflects the anticipated completion of Pharming's deal with Abliva, which is expected to introduce the drug candidate KL1333 into Pharming's pipeline. The deal also signifies a substantial increase in research and development (R&D) spending over the next four to five years. RBC Capital has incorporated a 33% probability of success (PoS) for KL1333 into their model, with projected peak sales surpassing $1.4 billion.
The new price target of €2.15 represents an optimistic view of the drug's market potential, despite the increased R&D investment leading to a lower bear case scenario of €0.30. However, the analyst also suggests a significantly higher bull case potential of €4.80, should KL1333 achieve blockbuster status.
The Outperform rating indicates that RBC Capital Markets continues to view Pharming Group favorably in light of the recent developments and future prospects. The analyst's comments underline the balance between the risks associated with increased R&D commitments and the potential rewards from the successful development and commercialization of KL1333.
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