Savara (SVRA) is back in focus after the FDA accepted the resubmitted biologics license application for Molbreevi, supported by positive long term phase III data and paired with expanded European patent protection.

Despite a small pullback in the latest session, with the share price down 3.25% to US$5.65, Savara has seen momentum build over a longer horizon. This is reflected in a 90 day share price return of 14.37% and a 1 year total shareholder return of 126.91%.

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Bulls see Savara as a rare disease specialist with a late stage asset moving through regulators, while bears focus on zero revenue and ongoing losses. Do the current US$5.65 share price and recent gains still look reasonable?

Preferred Price-to-Book of 8.1x: Is It Justified?

With Savara trading at $5.65, its current valuation stands out because the stock carries a price-to-book (P/B) ratio of 8.1x, which is well above several benchmarks.

The P/B ratio compares the market value of a company to its accounting book value, and for pre revenue biopharma companies like Savara, it often reflects how much investors are willing to pay today for the potential of a future drug asset rather than current earnings or cash flows.

In this case, the 8.1x P/B figure sits above both the US Biotechs industry average of 2.6x and a peer group average of 4x. This suggests investors are already assigning Savara a premium relative to similar companies with respect to balance sheet value.

Given those comparisons, the stock currently looks expensive on this preferred multiple, because the market price is several turns higher than both sector and peer averages without support from meaningful revenue.

Result: Price-to-book of 8.1x (OVERVALUED).

However, Savara still carries key risks, including zero revenue, ongoing losses of US$129.482 million, and dependence on Molbreevi's regulatory and commercial outcomes.

Next Steps

With sentiment split between Savara's risks and rewards, it makes sense to review the data directly and decide where you stand, starting with the 1 key reward and 2 important warning signs

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.