ABVX Stock Clocks Best Day In 11 Months On Analyst Upgrades After Fresh Data Eases Drug Safety Concerns

• BTIG raised its price target on Abivax to $175 from $150 and maintained a Buy rating.
• Wedbush said that it remains concerned about how the FDA will view cancer risk and the potential for a Black Box warning.
• Abivax also announced on Tuesday the launch of an underwritten public offering of around $600 million in American Depositary Shares.

Shares of Abivax (ABVX) clocked their best day in about 11 months on Tuesday on the heels of multiple price target revisions and updated safety and efficacy data from a study that addressed prior investor worries about cancer risk tied to its ulcerative colitis candidate, obefazimod.

ABVX stock closed 39% higher and slipped marginally by 0.15% after-hours, at the time of writing, after the company announced a $600-million public offering.

Trial Data

Abivax released the updated study data after-hours on Monday. The data showed malignancy rates, including non-melanoma skin cancers, remained consistent with background rates in ulcerative colitis patients. Four NMSC cases were reported in Part 2 of the trial—two per dose arm—mostly in patients with pre-existing risk factors, while two additional non-NMSC malignancies in the 50 mg group were deemed unrelated to the drug.

Abivax said the data reinforce obefazimod’s favorable benefit-risk profile. More than one-third of patients in the higher-dose group achieved clinical remission and mucosal healing at week 44. The company plans to submit a U.S. FDA new drug application in the fourth quarter.

Wall Street Weighs In

BTIG raised its price target on Abivax to $175 from $150 and maintained a Buy rating. The analyst said the latest update provided additional safety data confirming a sufficiently clean safety profile for obefazimod. BTIG’s new price target represents a potential upside of about 31% from the stock’s closing price on Tuesday.

Wedbush analyst David Nierengarten raised the firm’s price target to $110 from $90 but kept a Neutral rating. While the pooled safety data appeared in line with background malignancy rates in ulcerative colitis, Wedbush remains concerned about how the FDA will view cancer risk and the potential for a Black Box warning. Nierengarten’s new price target assumed a potential downside of about 17% from the stock’s closing price.

Jefferies upgraded Abivax to Buy from Hold and lifted its price target to $158 from $108, representing a potential upside of nearly 19% from the stock’s last close. The firm said the Part 2 update “appropriately addresses the key overhang facing the stock” and that management did a good job addressing investor concerns with the presentation of the safety data. Jefferies also noted that the efficacy profile continues to strengthen with additional data.

Abivax Launches $600-Million Public Offering

Separately, Abivax announced on Tuesday the launch of an underwritten public offering of around $600 million in American Depositary Shares. The company intends to use the net proceeds for U.S. commercialization expenses of obefazimod, clinical development in ulcerative colitis and Crohn’s disease, and general corporate purposes.

How Did ABVX Retail Traders React?

On Stocktwits, retail sentiment around ABVX stayed within the ‘bullish’ territory over the past 24 hours, while message volume jumped from ‘normal’ to ‘high’ levels.

A Stocktwits user opined that the capital raise is to convince interested partners that the company can also move forward solo.

Another user echoed the sentiment, positioning the capital raise as proof that the company received “lowball M&A offers.”

A third user voiced hopes for an imminent near-term buyout for the company.

ABVX stock has traded nearly flat year-to-date. 

Read More: UNCY Stock Clocks Worst Day In A Year — Analysts Keep Buy Ratings Despite ‘5-12 Month Delay’ In Drug Approval

For updates and corrections, email newsroom[at]stocktwits[dot]com.