Analysts Are Impressed With Reata's Pipeline After It Was Approved For A Rare Disorder Drug

After receiving U.S. regulatory approval for a medication treating a rare neurological condition, Reata RETA +172.67% Pharmaceuticals stock soared on Wednesday. Experts anticipate that the choice will boost the company's earnings and demonstrate the worth of its medical development pipeline.

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The medicine Skyclarys, also known as omaveloxolone, was approved by the Food and Drug Administration on Tuesday to treat Friedreich's ataxia in adults and adolescents who are 16 years of age and older. Reata's stock increased by more than 160% to $81.99 in Wednesday's premarket trading.

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In a research note, analysts at Citi predicted that Skyclarys' peak U.S. revenue would be in the neighborhood of $1.2 billion and that Reata's pipeline would be valued higher after it proved it could produce a useful commercial asset. Reata is also creating potential medications to treat chronic renal disease.

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The analysts at Citi increased their Buy rating and their target price for Reata shares from $53 to $120.

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"First-to-market status in an ultra-rare condition with no licensed treatments and a clear strategy to win a high share among the [about] 4,500 addressable U.S. The bull case is considerably extended by FA [Friedreich's ataxia] sufferers, according to the Citi analysts.

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According to The Fly, analysts at Barclays increased their target price for Reata from $50 to $90 while maintaining an Overweight rating for the stock.

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The neurodegenerative disorder Friedreich's ataxia, which frequently necessitates the use of a wheelchair and reduces life expectancy, is typically identified around adolescence. Reata intends to charge $370,000 annually for the medication, with insurance and a patient access program providing access.

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Reata CEO Warren Huff said in a statement on Tuesday, "We look forward to providing Skyclarys to qualified patients as soon as feasible.