Could an FDA Approval Send This Stock Flying?
For a small-cap stock, getting approval from the Food and Drug administration (FDA) for a drug can be the game changer that sends its value soaring. One stock investors should be watching closely right now is Travere Therapeutics (NASDAQ: TVTX). At a valuation of only $1.4 billion, it's a modestly sized healthcare company. But the FDA recently green-lighted one of its treatments, and here's why it could make the stock a red-hot buy.
In February, the FDA granted accelerated approval for Filspari, which treats IgA nephropathy (also known as Berger's disease), a type of chronic kidney disease. According to an analyst at Jefferies, this year the drug may bring in $35 million in revenue. But at its peak, it could hit $745 million in the U.S. market. For a company that reported $212 million in revenue for 2022, it's easy to see how this has the potential to transform the business and significantly accelerate Travere's growth rate.
On learning the news of the accelerated approval, multiple analysts boosted their price targets for Travere's stock, with some setting prices of $40 and higher. The current consensus analyst price target is at $33.20, which is nearly 50% higher from where the healthcare stock trades at today. Price targets normally look at where a stock might be in the next 12 to 18 months.
Source Fool.com
