Stifel: DBV Tech Shares Attractive Ahead Of Potential 2019 Approval For Peanut Allergy Drug

Shares of DBV TECHNOLOGIE/S ADR DBVT, a clinical-stage biotech developing treatment options for food allergies, present a favorable risk-reward profile over the next 12 months, according to Stifel.

The Analyst

Analyst Derek Archila initiated coverage of DBV Tech with a Buy rating and $35 price target.

The Thesis

Stifel projects a more than 50-percent probability for the BLA for DBV Tech's Viaskin Peanut — now in a Phase 3 clinical program for peanut allergy in children between 4 and 11 — to be accepted by the FDA, Archila said in the initiation note. (See his track record here.) 

This is despite the pipeline asset missing its lower confidence level in its Phase 3 study, the analyst said.

Stifel said the candidate is likely to receive a positive Adcom vote and subsequent approval on the basis of its compelling safety profile, efficacy data from its open-label extension study and the company's chief scientific officer, an internationally acclaimed food allergy expert.

Citing Stifel's physician survey, Archila said he sees potential for Viaskin Peanut to capture significant market share across the severity spectrum of peanut allergy patients. The analyst estimates worldwide peak sales of about $1.7 billion in 2034, although his 2020-2025 estimates are 25-65 percent below the Street consensus.

A positive panel vote in the first half of 2019 could push the stock toward $43, while an unfavorable verdict could drag it to $15, Archila said. 

"We believe the stock could get begin to see some upward momentum on the back of a BLA acceptance sometime in [the fourth quarter] ahead of the Adcom, which we expect in the [the first half]."

The Price Action

DBV Tech shares have gained about 4.4 percent year-to-date. The stock was trading up 1.32 percent to $23.84 at the time of publication Friday. 

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