In my opinion, Abivax is worth much more than its current share price of around €136. The market still seems to value the company as if there is a lot of uncertainty, but I believe much of that uncertainty has now been reduced. The company's lead drug, obefazimod, has delivered strong Phase 3 results in ulcerative colitis, and recent safety updates have helped rebuild investor confidence. At the same time, Abivax has raised enough cash to fund its operations for several years, meaning it can focus on getting the drug approved and launched instead of worrying about raising more money.
What makes the company especially interesting is the size of the opportunity. Ulcerative colitis is a growing market, and there is still a need for new treatments that are both effective and easy to take. Because obefazimod is an oral drug with a different way of working than existing therapies, it could become an attractive option for many patients if it is approved. On top of that, the drug is also being studied for Crohn's disease, which could make the commercial opportunity even bigger.
Another reason I think the shares are undervalued is the possibility of a takeover. Many large pharmaceutical companies need new products to replace older drugs that are losing patent protection. Abivax has a late-stage drug with blockbuster potential, making it the kind of company that could attract interest from a larger player. If a bidding process were ever to happen, the purchase price would likely be well above the current share price.
For these reasons, I believe a fair value of around €220 per share is realistic.
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