After surging by 1300%, Abivax's "mad cow narrative" may not have ended yet.

French biotechnology company Abivax (ABVX.US) started the year with a market capitalization of less than 5 billion US dollars. After a rapid rise, the market value has now exceeded 80 billion US dollars, and some analysts believe there is even more room for growth. The market's optimism began in July when Abivax announced positive data for its experimental drug for treating chronic inflammatory bowel disease. This led to a stock price increase of over 1300%, making it the best-performing stock in the European benchmark STOXX 600 index this year. Bullish reason one: Great potential for ulcerative colitis treatment Investors are watching to see if patients with ulcerative colitis who take Abivax's obefazimod tablets can maintain symptom relief. The study results are expected to be announced in the second quarter of 2026, and if successful, Abivax will be able to submit the drug for regulatory approval. Additionally, the company is expected to announce the mid-term trial results for the treatment of another inflammatory bowel disease, Crohn's disease, in the second half of this year. Abivax CEO Marc de Garidel said, "The more we study this drug, the more excited we get. Despite being a small company, we hope to lead the market with an outstanding drug." For Abivax, which is listed in both Paris and New York, the risk is huge. The company initially viewed obefazimod as a potential treatment for HIV. Morgan Stanley's optimistic valuation shows that its American Depositary Receipt price could rise by over 40% from current levels, while a pessimistic valuation could see a drop of over 90%. In a report released in September, Morgan Stanley analysts pointed out that the potential success or failure of obefazimod in treating ulcerative colitis and Crohn's disease is seen as a key catalyst for the company's stock price. Despite this, the drug has shown promising results. Obefazimod is an orally administered small molecule drug with a mechanism of action different from existing inflammatory bowel disease (IBD) therapies. It regulates inflammatory responses by up-regulating a microRNA called miR-124, rather than directly inhibiting inflammatory factors. This endogenous regulatory approach is believed to balance efficacy and safety better, especially in high inflammation environments. In clinical trials of obefazimod, fewer and milder adverse events were observed, primarily headaches, with no serious side effects such as cardiovascular events or carcinogenicity. In contrast, some existing IBD therapies (such as JAK inhibitors) come with serious side effect warnings. This differentiated safety advantage makes it a more attractive treatment option, especially for the young patient population requiring long-term medication. Ulcerative colitis and Crohn's disease are inflammatory bowel diseases that can cause frequent diarrhea and abdominal pain. Wolfe Research analysts believe obefazimod could achieve peak sales of around 6 billion euros (7 billion US dollars) and take a "significant" market share in the treatment of these diseases. The success of obefazimod is seen as being able to capture a significant share of this market, with the IBD market expected to reach approximately $30 billion by 2030. This experimental drug has shown promising results. In July of this year, Abivax announced that, in late-stage trials, patients taking obefazimod had their symptoms of moderate to severe active ulcerative colitis disappear after eight weeks. Sebastiaan van der Schoot, an analyst at Van Lanschot Kempen, said that based on data from previous mid-term trials, these results were "very impressive and exceeded everyone's expectations." Van der Schoot claimed that the induction trial results showed that Abivax's tablet was "among the strongest in all options, including injectables." Garidel said the company plans to submit the candidate drug for US regulatory approval by the end of 2026, depending on the late-stage trial data scheduled to be released in the second quarter. He added, "We have a fairly aggressive timeline to apply, and the company's goal is to go public in the United States in the third quarter of 2027." Bullish reason two: Abivax becomes a hot acquisition target Meanwhile, investors have been rushing to buy the stock, especially as Abivax has been touted as a possible acquisition target. Last month, Truist Securities called the company a "strategically attractive potential acquisition target." Meanwhile, Goldman Sachs Group, Inc. recently included Abivax on its list of stocks favored by hedge funds. However, potential acquirers still need to proceed with caution. Swiss biopharmaceutical company MoonLake Immunotherapeutics saw its market value plummet significantly after announcing late-stage trial data for its experimental skin disease treatment drug in late September. Analysts indicated that the results did not prove its superiority to existing competitive drugs on the market. MoonLake had previously been seen as an attractive acquisition target, with its market value soaring to $4 billion at one point, but now it is only worth about $1 billion. Jared Holz, a healthcare expert at Mizuho Securities, said, "Pharmaceutical companies often tend to avoid risk in mergers and acquisitions and prefer assets that have shown late-stage clinical data. This means they are willing to pay a higher price for such visibility." However, Holz remains "very optimistic" about the near-term prospects for the biotech sector, given the frequent trading activity in recent months. The Nasdaq Biotechnology Index has been hovering near historic highs and has risen by about 30% so far this year. Continued positive clinical trial results will help maintain this momentum. Antoine Papiernik, Chairman and Managing Partner of Sofinnova Partners, a European venture capital firm and investor in Abivax, said, "Data is important, and our portfolio needs to prove its worth through data." Currently, Wall Street analysts have a consensus rating of "buy" or "strong buy" on Abivax and generally hold a positive outlook, with an average target price ranging from $120 to $130.