ZVRA stock is a buy, Roth says

Following an update from the company, Roth MKM analyst Jonathan Aschoff has maintained his “Buy” rating on Zevra Therapeutics (Zevra Therapeutics Stock Quote, Chart, News, Analysts, Financials NASDAQ:ZVRA).

On December 27, Zevra Therapeutics announced the resubmission of its New Drug Application (NDA) for arimoclomol, an investigational therapeutic candidate for the treatment of Niemann-Pick disease type C (NPC) to the U.S. Food and Drug Administration on December 22, 2023.

“The Zevra team has worked diligently to deliver a high quality and thorough resubmission of the NDA for arimoclomol following multiple interactions with the FDA and after incorporating direction from the agency,” said Neil McFarlane, President and Chief Executive Officer of Zevra. “We continue to accelerate our launch preparations in anticipation of FDA approval, and believe we are one step closer to getting arimoclomol into the hands of patients who are seeking a treatment.

The analyst summarized the development.

“Within 30 days, ZVRA expects acknowledgment from the FDA that its resubmission is complete and to have a defined PDUFA date, which should be six months from the resubmission date, given our view that it is a Class II resubmission,” he wrote. “ZVRA is sufficiently confident in its resubmission to prepare for arimoclomol’s launch prior to the anticipated future PDUFA date. The NDA addresses the Complete Response Letter‘s issues by providing additional evidence to support the use of the Niemann-Pick type C Clinical Severity Scale (NPCCSS) and adding new study results to support arimoclomol’s purported mechanism of action. Other new data was derived from non-clinical studies, natural history comparisons, real-world data generated from the ongoing early access programs, and data from the four-year, open-label extension of the arimoclomol Phase 2/3 trial which shows that arimoclomol is associated with a reduction in long-term NPC progression.”

In a research update to clients December 28, Aschoff maintained his “Buy” rating and one-year price target of $22.00 on ZVRA.

“Our 12-month price target of $22/share is based on a DCF analysis using a 20% discount rate that is applied to all cash flows and the terminal value, which is based on a 5x multiple of our projected 2031 operating income of about $290 million. Commercial success outside our modeled products and territories would provide upside to our valuation,” the analyst explained. “Factors that could impede the achievement of our target price include, but are not limited to: (1) failure and/or setbacks of pipeline candidates in clinical studies; (2) failure of pipeline candidates to gain regulatory approval; (3) departure of key personnel; and (4) smaller than projected commercial opportunity due to changes in market size, competitive landscape, and drug pricing and reimbursement.”