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Battered-down biotechnology stock Travere Therapeutics could see a strong turnaround, according to Citi. Analyst Carly Kenselaar upgraded the clinical-stage company to buy/high risk and raised her price target by $3 to $10, which suggests shares could climb nearly 59% over the next 12 months. Kenselaar’s new rating comes after some positive signals indicate the company is on track to obtaining full approval for its Filspari drug. Among these signs is the Food and Drug Administration’s support of a filing for the first quarter of 2024, the analyst said. “With the stock trading below cash, we believe risk/reward is skewed quite favorably into a full approval decision, supporting our upgrade,” Kenselaar wrote in a Tuesday note. “The agency’s support of a 1Q24 filing suggests Filspari is unlikely to be pulled from the market as some may have initially feared and rules out the need for additional data prefiling.” Shares are down nearly 63% for the year, with much of those losses driven by data released in late September from a late-stage study that showed Filspari failed to reach statistical significance in treating a rare kidney disease. Shares are soaring this week, however, after Travere announced Monday that it plans to reduce its workforce by about 20% and focus its near-term resources on two of its ongoing programs, including its Filspari launch. The move would extend its cash runway into 2028, the company said, which Kenselaar pointed to as another catalyst for her increased price target. The stock popped 24.5% on Tuesday. Filspari is a prescription oral medicine developed that aims to reduce levels of protein in the urine of adults with a kidney disease called primary immunoglobulin A nephropathy, or IgAN. Citi raised its probability adjustment for Filspari’s conversion to full approval for IgAN from 65% to 75%, Kenselaar wrote, citing the positive outcome of the pre-NDA meeting, which is generally a company’s last interaction with the FDA prior to a new drug application submission of their drug, as well as strong feedback on Filspari from an ex-FDA expert.
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