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United Therapeutics (NASDAQ:UTHR) traded lower on Thursday after Morgan Stanley downgraded the Tyvaso maker to Equal Weight from Overweight, citing a balanced risk-reward setup following strong gains this year.
Morgan Stanley said that United Therapeutics (UTHR), which markets drugs for a lung disorder called pulmonary arterial hypertension (PAH), has added over 47% this year, outperforming the broader biotech industry.
Given the YTD outperformance, “we now see risk/reward as more balanced,” analyst Terence Flynn wrote while raising his price target on UTHR to $321 from $310 per share.
According to Flynn, potential upside-generating catalysts for the stock include the company’s moves to drive uptake of its lead product, Tyvaso, in pulmonary hypertension associated with interstitial lung disease (PH-ILD).
Downside risks include a higher-than-anticipated competitive threat from rival PAH therapies, namely Winrevair and Yutrepia, developed by Merck (MRK) and Liquidia Corporation (LQDA) respectively.