On Tuesday, Acrivon Therapeutics Inc (NASDAQ:ACRV) received a boost from H.C. Wainwright, with the firm raising its price target on the stock to $22 from $20 while maintaining a Buy rating. The adjustment reflects a positive outlook based on a detailed financial analysis.
The investment firm's decision is rooted in a discounted cash flow (DCF) analysis which projects financial estimates up to 2037. A 12% discount rate and a 0% terminal value were applied, consistent with other platform technology companies in their coverage. Acrivon's valuation, according to the firm, is influenced by the potential of its ACR-368 drug for treating various types of cancer, including second-line platinum-resistant ovarian cancer, with a 45% probability of success (POS), second-line endometrial cancer at a 25% POS, and fourth-line bladder cancer also at a 25% POS.
The firm's stance takes into account several risks that could impact Acrivon's future. These include possible safety issues in clinical or preclinical programs, clinical efficacy falling short of expectations, significant competition in the market, regulatory challenges, anticipated financing needs of approximately $250 million through 2037, and the company's cash runway extending into the second half of 2026. Moreover, the protection of Acrivon's intellectual property is also considered a potential risk factor.
The financial analysis by H.C. Wainwright suggests confidence in Acrivon's ongoing clinical studies and its commercial prospects. The firm's outlook remains optimistic despite the acknowledged risks, and it has not factored in other pipeline assets or indications in the valuation, focusing solely on the current potential of ACR-368.
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