Nuvalent initiated with a Market Perform at SVB Securities

SVB Securities initiated coverage of Nuvalent with a Market Perform rating and $42 price target. The focus for investors is on NVL-655, an ALK inhibitor, coming into a key catalyst for shares in the second half of 2023, the firm notes. Given high expectations going into the event, as reflected by the significant share price increase year-to-date, as well as several potential concerns, SVB believes there is more risk than reward at these levels. The lack of catalysts after the NVL-655 data readout could shift focus onto a competitor ROS1 inhibitor launch. The firm thinks expectations for this launch are also high and could pose downside risk to shares.