Jefferies upgrades Abivax to Buy, lifts PT as safety concerns over obefazimod ease

Investing.com -- Jefferies upgraded Abivax to "Buy" from "Hold" and raised its price target to $158 from $108 after updated Phase 3 data for its lead drug candidate, obefazimod, alleviated concerns over previously reported malignancy cases and reinforced confidence in the therapy's efficacy.

The upgrade reverses Jefferies' cautious stance adopted earlier this month, with the brokerage saying the latest ABTECT Part 2 update removed a key overhang on the stock. It said management's explanation of the safety data and continued improvements in efficacy strengthened the investment case, although risks around financing, commercialization and regulatory execution remain.

Jefferies said details disclosed in the latest update suggest the non-melanoma malignancy cases are unlikely to be treatment-related, while any risk of non-melanoma skin cancer could likely be addressed through a warning label and monitoring recommendations rather than posing a significant regulatory obstacle.

The brokerage also said obefazimod continues to demonstrate a strong efficacy profile in ulcerative colitis, particularly in maintenance treatment, with endoscopic remission data supporting its anti-inflammatory effects. It added that the results increase confidence ahead of the company's Phase 2 Crohn's disease data expected in mid-2027.

While Jefferies said a strategic acquisition remains the preferred path given the commercial demands of launching an inflammatory bowel disease therapy, it believes Abivax has options to address its cash runway and sees further upside from regulatory progress and growing investor appreciation of the clinical data.

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