What’s Next For uniQure Stock After A 13% Drop Last Week?

[Updated: 6/25/2021] QURE Stock Decline

The stock price of uniQure stock (NASDAQ: QURE), a gene therapy company, has seen a a large 13% drop over the last five trading days. The company recently announced that the U.S. FDA has asked for eighteen months of data for its hemophilia B gene therapy, implying a six month delay in filing for accelerated approval. While the delay does not bode well for uniQure, given there are other players working on hemophilia B gene therapy, including Roche, uniQure has reported positive data from late stage clinical trials. As such, despite a delay, an accelerated approval is more likely for uniQure’s gene therapy. In another development, the company recently announced that it will acquire Corlieve Therapeutics, which is working on AMT-260 to treat temporal lobe epilepsy. Note that TLE is the most common form of focal epilepsy with 1.3 million patients in the U.S. uniQure will pay Euro 44 million upfront and over Euro 200 million in milestone payments.

Now that QURE stock has fallen 13% in just five days, will it resume its downward trajectory over the coming weeks, or is a rise in the stock imminent? According to the Trefis Machine Learning Engine, which identifies trends in the company’s historical stock price data, returns for QURE stock average nearly -1.5% in the next one-month (21 trading days) period after experiencing a 13% drop over the previous week (five trading days).

However, we believe that the stock is likely to rise going forward, and long-term investors can use the recent dip to buy QURE stock for better returns. The positive findings in late stage clinical trial, attractive levels to enter given the recent decline, and if approved, the company will have first mover advantage for hemophilia B gene therapy, these factors will likely result in QURE stock seeing much higher levels going forward.

But how would these numbers change if you are interested in holding QURE stock for a shorter or a longer time period? You can test the answer and many other combinations on the Trefis Machine Learning Engine to test uniQure stock chances of a rise after a fall. You can test the chance of recovery over different time intervals of a quarter, month, or even just one day!

Some Fun Scenarios, FAQs & Making Sense of uniQure Stock Movements:

Question 1: Is the average return for uniQure stock higher after a drop?

Answer: Consider two situations,

Case 1: uniQure stock drops by -5% or more in a week

Case 2: uniQure stock rises by 5% or more in a week

Is the average return for uniQure stock higher over the subsequent month after Case 1 or Case 2?

QURE stock fares better after Case 2, with an average return of 2.5% over the next month (21 trading days) under Case 1 (where the stock has just suffered a 5% loss over the previous week), versus, an average return of 3% for Case 2.

In comparison, the S&P 500 has an average return of 3.1% over the next 21 trading days under Case 1, and an average return of just 0.5% for Case 2 as detailed in our dashboard that details the average return for the S&P 500 after a fall or rise.

Try the Trefis machine learning engine above to see for yourself how uniQure stock is likely to behave after any specific gain or loss over a period.

Question 2: Does patience pay?

Answer: If you buy and hold uniQure stock, the expectation is over time the near-term fluctuations will cancel out, and the long-term positive trend will favor you – at least if the company is otherwise strong.

Overall, according to data and Trefis machine learning engine’s calculations, patience absolutely pays for most stocks!

For QURE stock, the returns over the next N days after a -5% change over the last 5 trading days is detailed in the table below, along with the returns for the S&P500:

You can try the engine to see what this table looks like for uniQure N.V. after a larger loss over the last week, month, or quarter.

Question 3: What about the average return after a rise if you wait for a while?

Answer: The average return after a rise is understandably lower than after a fall as detailed in the previous question. Interestingly, though, if a stock has gained over the last few days, you would do better to avoid short-term bets for most stocks.

It’s pretty powerful to test the trend for yourself for uniQure N.V. stock by changing the inputs in the charts above.

[Updated: 3/31/2021] Buy Or Sell uniQure Stock

We believe that uniQure stock (NASDAQ: QURE), a gene therapy company, is a good buying opportunity at the present time. QURE stock trades near $30 currently and it is, in fact, down 53% from its pre-Covid high of $65 in February 2020 – just before the coronavirus pandemic hit the world. QURE stock has declined 26% since its March 2020 levels of $41, compared to 76% gains for S&P 500. The underperformance can primarily be attributed to its Hemophilia B gene therapy clinical trials being put on hold by the U.S. FDA in December 2020. While the stock tried to recover over the next few months, a lower than estimated Q4 performance resulted in a further correction.

The 54% rise over the last two years is justified given the strong fundamentals of the company. uniQure’s revenues have grown 186% from $13.1 million in 2017 to $37.5 million in 2020. Note that the company does not have any commercial product yet, and its revenues are garnered from licensing and collaboration with other pharmaceutical companies. The company has issued more shares over the recent years, resulting in a large 65% growth in total shares outstanding. This adversely impacted the revenue-per-share, which grew only 74% (compared to 186% revenue growth) to $0.84 in 2020, compared to $0.49 in 2017. Despite the strong performance over the recent years, the company’s P/S multiple has contracted. uniQure’s P/S multiple expanded from 40x in 2017 to 43x in 2020, before dropping to 36x currently. Our dashboard, ‘What Factors Drove 54% Change In uniQure Stock between 2017 and now?‘, has the underlying numbers.

So what’s the likely trigger and timing for upside?

Now, uniQure yesterday stated that an investigation clears Hemophilia B gene therapy of causing liver cancer in a patient, which led to the FDA putting the trial on hold back in December 2020. This is a positive development for the company. The Hemophilia B gene therapy alone can see peak sales of $1.2 billion if approved, while Huntington’s disease treatment can see peak sales of over $2 billion. We believe that both the Hemophilia B and Huntington’s Disease treatment being developed by the company looks promising, and QURE stock after the recent correction, looks attractive at the current valuation. For perspective, the consensus price estimate of QURE currently stands at $68, which is a massive 2.2x higher from the levels the stock is trading at currently.

We see that the company’s P/S ratio is high currently, which is common for pharmaceutical companies with promising candidates in clinical trials, and as the company grows, the multiple is likely to come down. That said, a decline in P/S ratio will be more than offset by growth in RPS, given the expected surge in revenues, and thereby resulting in much higher levels for QURE stock.

While QURE stock may see higher levels, 2020 has created many pricing discontinuities which can offer attractive trading opportunities. For example, you’ll be surprised how counter-intuitive the stock valuation is for UnitedHealth vs Ingevity.

See all Trefis Featured Analyses and Download Trefis Data here