Jefferies Downgrades AveXis, Cites Valuation

Jefferies analysts downgraded AveXis Inc AVXS to Hold from Buy citing valuation. The brokerage also slashed its price objective to $39 from $42.

Analysts continued to view the company's AVXS-101 as a promising treatment for SMA Type 1. However, they viewed shares fairly valued given the recent surge in the stock price.

"We note that guidance from FDA on design of pivotal trials or positive efficacy data in SMA Type 2 &3 would provide upside but we don't have enough data on either to incorporate in our model. At the Cure SMA meeting, AVXS-101 generated interest but there was little consensus as it relates to regulatory requirements," the analysts said in a note.

Though the brokerage downgraded shares, Jefferies believes there could be upside if the FDA enables the company to proceed into a pivotal study without a comparator arm and accepts natural history data. Aside from that, if the regulator accepts alternate endpoints like motor milestones compared to events-based data, then that would help expedite study timelines offering additional upside potential to its model.

According to the three analysts, the other potential upside could relate to a possible label expansion beyond Type 1s into Type 2s and 3s. The brokerage thinks upside might come from data from a study that would commence in the second half of the current year.