Abivax shares rose sharply on the Paris Bourse on Monday, reaching new annual highs, as two US analysts expressed optimism about the company's lead drug candidate.

At around 3:40 pm, the biotech company's shares gained over 4%, having reached their highest level since the start of the year at over 15 euros.

At the same time, the Nasdaq-listed ADS gained 3% to around $16.3.

In a note released this morning, analysts at Guggenheim Securities said they had initiated coverage of the stock with a Buy recommendation and a price target of $50.

In their study, they explained that they were cautious about the outcome of the Phase III clinical trial on obefazimod in ulcerative colitis, the results of which are expected next year.

Guggenheim - which believes that this small oral molecule could well become the reference treatment for the disease - says it expects annual sales of up to $2.6 billion in inflammatory bowel disease (IBD).

Piper Sandler, too, is monitoring the stock with an 'overweight' recommendation and a target of $42, again because of its optimism about obefazimod's potential.

While acknowledging that the market for IBD treatment is currently very crowded, the research firm believes that Abivax's treatment stands out for its ability to modulate inflammation without weakening the immune system as a whole.

According to its estimates, the company's annual sales could reach 1.29 billion euros ($1.37 billion) by 2033.

Piper Sandler adds that obefazimod could well prove effective in other therapeutic indications in the near future.

Since January 1, Abivax's market capitalization has recovered by more than 53%, but the stock is still trading at levels around 25% below its 2015 IPO price.

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