Theravance Biopharma's Valuation Has Gotten A Little Carried Away - AbbVie (NYSE:ABBV)

Baird downgraded the shares of

Theravance Biopharma Inc TBPH

to Underpeform but raised its price target to $24 from $19. The firm believes the current valuation is unsustainable given the long path to approval and the significant spend along the way. The firm sees a correction in the stock from current levels.

Long Road Ahead for Jak Program

Analyst Brian Skorney sees increased interest in inflammatory bowel disorder programs. Even with an aggressive timeline for Theravance's lead drug candidate for ulcerative colitis, the analyst expects a launch only by 2023, well after Pfizer Inc. PFE's Xeljanz, Celgene Corporation CELG's ozanimod, Gilead Sciences, Inc. GILD's filgotinib and AbbVie Inc ABBV's ABT-494.

Attrition Post Mid-Stage Worrisome

Baird noted that some of Theravance's treatment candidates, namely Velusetrag, TD-1792 and axelopran, have all been stuck in a limbo after getting into mid-stage trials. The firm cautioned that the current valuation of the company implies a higher probability of success for the company's current pipeline than is reasonable for anyone in the sector.

At the time of writing, shares of Theravance was down 12.42 percent at $32.79.

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