For the past year, shares of Trevena (NASDAQ:TRVN) haven’t really done much. The last time we did a Trevena stock forecast was in October of 2017, which you can read here. It’s been pretty much dead money until this summer when shares finally broke out. In this article, we take a hard look and issue a new Trevena stock forecast.
First up, here’s a little background if this is your first Trevena stock forecast. Trevena, Inc. is a biopharmaceutical company focused on the development and commercialization of novel medicines for patients with CNS disorders. The Company has one approved product in the U.S., OLINVYK™ (oliceridine) injection, indicated in adults for the management of acute pain severe enough to require an intravenous opioid analgesic and for whom alternative treatments are inadequate.
The Company also has four novel and differentiated investigational drug candidates: TRV250 for the acute treatment of migraine, TRV734 for maintenance treatment of opioid use disorder, and TRV027 for acute lung injury / abnormal blood clotting in COVID-19 patients. The Company has also identified TRV045, a novel S1P receptor modulator that may offer a new, non-opioid approach to treating a variety of CNS disorders.
The recent excitement surrounding Trevena pertains to Olivynk. In early August, the FDA approved Olinvyk (oliceridine), an opioid agonist for the management of moderate to severe acute pain in adults, where the pain is severe enough to require an intravenous opioid. Trevena sees a significant clinical need in the hospital setting for an effective and well-tolerated IV analgesic to help manage patients’ moderate-to-severe pain.
“Addressing the opioid crisis remains a top priority for the FDA. We will continue to do everything we can to reduce the number of Americans who are addicted to opioids and cut the rate of new addiction through a number of cross-agency initiatives,” said Douglas Throckmorton M.D., deputy director for regulatory programs in the FDA’s Center for Drug Evaluation and Research. “Importantly, the FDA will only approve new drug applications, including those for opioid medications, following a rigorous review to evaluate the risks and benefits and ultimate determination that the data support safety and effectiveness. Of note, this particular medication is only indicated for use in a controlled clinical setting, meaning under medical supervision and not for use in a take-home prescription.”
Trevena will launch Olinvyk in Q4 and we anticipate the approval will act as a catalyst for several of Trevena’s ex-US partners to provide critical non-dilutive capital in the form of milestone payments.
Initial adoption to take place amongst high-risk patients. The drug will get more widespread use eventually because Olinvyk is designed to stimulate the activation of the G protein pathway but not the B Arrestin pathway, meaning it should (theoretically) bring about the analgesic effects of an opioid but with the adverse effects of the latter.
If this proves to be the case, it could be a real game-changer in a sector that desperately needs an overhaul.
Trevena Stock Forecast
Cantor Fitzgerald just came out and issued a $5 price target in its recent Trevena stock forecast. Previously, H.C. Wainwright analyst Douglas Tsao also raised his price target to $5 on the Olinvyk news.
We are a little more bullish. Peak sales of Olinvyk are forecast to be $284 million, according to H.C. Wainwright. Trevena has a current market cap of $296 million. Small-cap biotechs usually trade at 5x sales. That would give Trevena a share price of $7.85.
There’s even more room to run if Trevena makes progress with either one of its four other candidates: TRV250, TRV734, TRV027, and TRV045. TRV027 is already enrolled in a proof-of-concept study in COVID-19 patients at Imperial College London.
How much more room can Trevena stock run? In 2016, shares were trading over $12.
Last month, Trevena raised $50 million. Dilution is no longer a concern. As things progress with Olinvyk as it gets into more hospitals and becomes the go-to treatment for pain, we expect its market cap to reflect its true potential. At current levels, Trevena is a discount entry opportunity and one with limited downside, especially now that it has an FDA-approved drug. Not many small-cap bios can boast that and Trevena certainly can. With over 10% of the float short, the shorts are going to be forced to cover as their bear thesis has been destroyed now that Olinvyk is approved.
As always, good luck to all (except the shorts)!
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Disclosure: We have no position in NASDAQ:TRVN or any of the securities mentioned. We wrote this article ourselves and it expresses our own opinions. We are not receiving compensation for it. We have no business relationship with any company whose stock is mentioned in this article. Insider Financial is not an investment advisor and does not provide investment advice. Always do your own research and make your own investment decisions. This article is not a solicitation or recommendation to buy, sell, or hold securities. This article is meant for informational and educational purposes only and does not provide investment advice.