Analyst Tessa Romero from J.P. Morgan maintained a Buy rating on Upstream Bio, Inc. and keeping the price target at $35.00.
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Tessa Romero’s rating is based on several promising factors regarding Upstream Bio, Inc.’s lead asset, verekitug. The company is expected to deliver positive phase 2 results for verekitug across multiple type 2 inflammatory conditions, starting with chronic rhinosinusitis with nasal polyps (CRSwNP) and followed by severe asthma. This anticipation of positive outcomes is supported by the unique targeting mechanism of verekitug, which focuses on the TSLP receptor rather than the ligand, potentially offering a differentiated and more potent treatment option.
Moreover, the market currently undervalues UPB shares, not fully accounting for the potential of verekitug, which is ahead of other competitors in its development stage. The expected milestones over the next year could significantly enhance the stock’s value. Additionally, the potential for a favorable catalyst from the VIBRANT trial results, coupled with a low probability of adverse safety signals, strengthens the Buy rating. The extended dosing interval of verekitug also positions it as an attractive option in the biologic treatment landscape, with a conservative peak sales assumption of $500 million for CRSwNP.