Roth MKM has initiated coverage of Reviva Pharmaceuticals (RVPH) with a Buy rating and a $7 price target, driven by promising Phase 3 clinical trial results for its lead product, brilaroxazine, in the treatment of schizophrenia.
The analyst at Roth MKM highlighted the "unequivocal" Phase 3 results, emphasizing brilaroxazine's impact on positive, negative, and cognitive symptoms in schizophrenia patients. The reported effect size of 0.6 surpasses that of many currently available antipsychotics, contributing to the firm's positive outlook on Reviva's stock. The RECOVER-1 study demonstrated that brilaroxazine effectively addresses multiple symptom domains, offering a potential advantage over existing treatments.
Clinical Trial Data and Efficacy
Data from the Phase 3 RECOVER trial and ongoing open-label extension (OLE) trials have shown significant reductions in schizophrenia symptom domains. Specifically, 108 patients have completed a full year of treatment in the OLE trial, with over 250 patients reaching the six-month mark. These results are considered crucial for Reviva's planned New Drug Application (NDA) submission to the U.S. Food and Drug Administration (FDA).
Analyst Projections and Market Potential
Roth MKM projects that brilaroxazine has the potential to achieve worldwide sales of $1.9 billion by 2035. This projection is a key factor in the optimistic valuation and the establishment of the $7.00 price target for Reviva Pharmaceuticals' shares. Other analysts also share a positive outlook, with EF Hutton initiating a Buy rating with a price target of $15.00 and H.C. Wainwright maintaining a Buy rating with an adjusted 12-month price target of $14.
Financial Considerations and Future Milestones
While Reviva's current pro forma cash position of approximately $23.5 million is expected to fund operations into the first quarter of 2025, concerns about potential near-term dilution have been noted. The company holds more cash than debt on its balance sheet, but short-term obligations exceed liquid assets. The anticipated NDA filing for brilaroxazine in mid-2026 is seen as a significant milestone that could counterbalance funding concerns.
Intellectual Property and Regulatory Pathway
Reviva has been granted U.S. and European patents for brilaroxazine, further strengthening its intellectual property rights. The company is progressing towards the NDA filing, aiming to secure regulatory approval and market entry for brilaroxazine in the global antipsychotic market.
