On Tuesday, Swedish Orphan Bio (SOBI:SS) (OTC: SWTUY) stock experienced a shift in rating as Jefferies downgraded the company from “Buy” to “Hold,” coupled with a reduction in the price target to SEK300 from SEK340. The downgrade was primarily due to revised expectations for the company’s royalty income and sales projections for key products.
The reassessment by Jefferies includes a lowered forecast for Beyfortus peak royalty income, now expected to be SEK4.2 billion, a decrease from the previous SEK5.5 billion estimate.
This adjustment accounts for anticipated market share losses to competitor Merck’s clesrovimab starting in 2025, following its positive Phase 3 trial outcomes.
The analyst also cited concerns about the upcoming IDWeek conference, scheduled for October 16-19. Further data on clesrovimab may potentially impact the perceived risk/reward balance for Swedish Orphan Bio. Should the new clesrovimab data be favorable, it could pose additional challenges for Beyfortus.
Moreover, Jefferies has taken a more conservative stance on the prospects for Vonjo, Swedish Orphan Bio’s treatment option. The firm has decreased its peak sales estimate for Vonjo to SEK2.5 billion from the previous SEK3.6 billion.
The decision reflects the increased competitive pressures from GlaxoSmithKline (NYSE:)’s Ojjaara, which is expected to affect Vonjo’s market performance.
The revised price target and stock rating reflect Jefferies’ cautious approach to Swedish Orphan Bio’s future financial performance in light of these developments.
The firm’s analysis suggests a tempered outlook for the company’s revenue growth due to the evolving competitive landscape within the pharmaceutical industry.
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