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.
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.
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.
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.