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Why Roivant Sciences Stock Is Soaring Today

By Keith Speights – Oct 26, 2021 at 12:35PM

Key Points

  • Cowen, Jefferies, and Truist initiated coverage on Roivant with positive ratings.
  • Roivant awaits an FDA approval decision on tapinarof in treating plaque psoriasis.
  • The company's pipeline also includes five candidates in phase 2 testing.

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Three analysts initiated positive coverage on the biotech stock.

What happened

Shares of Roivant Sciences (ROIV -1.80%) were soaring 20.3% higher as of noon EDT on Tuesday. The nice gain came after three analysts initiated coverage on the stock.

Cowen initiated coverage on Roivant with an outperform rating. Jefferies initiated coverage on the biotech stock with a buy rating and set a price target of $10. Truist Securities also initiated coverage on Roivant with a buy rating and set a price target of $15.

So what

Investors shouldn't make decisions about a stock solely because analysts like it. However, it can be helpful to understand what makes the stock so attractive to the analysts. In this case, the excitement focuses on Roivant's pipeline spread across a number of companies in which it owns significant stakes.

A person wearing a coat and tie giving a thumbs up.

Image source: Getty Images.

Roivant awaits potential approval by the U.S. Food and Drug Administration (FDA) for Dermavant's tapinarof in treating plaque psoriasis. Dermavant is also evaluating the experimental drug in a phase 3 study for treating atopic dermatitis.

In addition, Roivant's family of companies together has five candidates in phase 2 testing. These include Aruvant's ARU-1801 gene therapy targeting sickle cell disease, Dermavant's topical drug cerdulatinib in treating skin disease vitiligo, and three experimental biologic drugs developed by Immunovant.

Now what

Roivant could soon have more positive catalysts. The FDA approval decision on tapinarof as a treatment for plaque psoriasis is expected in the second quarter of 2022. Immunovant hopes to advance IMVT-1401 into phase 3 testing for treating autoimmune disorder myasthenia gravis early next year, as well.

Keith Speights has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Jefferies Financial Group Inc. The Motley Fool has a disclosure policy.

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