Our price target of $67 is derived from our discounted cash flow (DCF) analysis in which we project risk-adjusted free cash flows to 2035 and then discount back at 10% annually, applying a 2% terminal growth rate. In our biotechnology coverage universe, we generally utilize a 10% discount rate for all companies that have commercial stage assets.

We rate BBIO as High Risk based on the usual volatility of biotech stocks and uncertainty/risk related to clinical trials and late-stage drug development.

BridgeBio has many of the risks associated with biotechnology companies. First, sales of Attruby are key to valuation. Sales below expectations could negatively impact shares. Next, share performance is also closely linked to clinical and regulatory updates. Any such updates that fall short of expectations would lead to downside versus our rating. Due to the high cost of BridgeBio’s development effort, we highlight the risk of potentially equity or product financings. If the impact on the company from any of these factors proves to be greater than we anticipate, the stock could fail to meet our target price.