Biotech Inventiva's 50% surge shows investor optimism over liver disease drug

By Danilo Masoni

MILAN, Jan 28 (Reuters) - A surge in Inventiva IVAA.PA shares, up about 50% in the first few weeks of 2026, highlights investors' appetite for betting on the loss-making French biotech, which is on the verge of entering the fast-growing treatment market for liver disease MASH.

MASH, a chronic fatty liver condition linked to obesity and diabetes, is emerging as a key cause of liver problems.

U.S. biotech Madrigal's MDGL.O Rezdiffra and Novo Nordisk's NOVOb.CO weight-loss drug Wegovy have already been approved to treat MASH. The market is expected to reach about $24 billion by the next decade, from a tiny base in 2024, analysts estimate.

Investor hopes are rising ahead of Inventiva's pivotal U.S. Phase 3 readout for its oral MASH candidate lanifibranor, due in the second half of this year.

Positive data would pave the way for commercialisation, boosting revenues, analysts say. It could also make Inventiva a potential target for Big Pharma seeking MASH exposure without the cost and time of developing drugs in-house.

A flurry of 2025 deals underscored Big Pharma's interest in MASH. Novartis NOVN.S bought 89bio ETNB.O, GSK GSK.L acquired a liver-disease drug from Boston, and Novo purchased Akero.

Inventiva CEO Andrew Obenshain said recent therapy approvals and continued strategic interest from pharmaceutical companies showed the MASH market has reached "a new level of credibility".

In comments emailed to Reuters on Tuesday, he said the company aimed to deliver "high-quality" Phase 3 data in the second half of 2026.

Leerink Partners, a U.S. healthcare-focused investment and research firm, sees a "value-inflecting catalyst" ahead. It assigns a 70% probability of success for lanifibranor and models a potential U.S. launch in 2028.

"Inventiva trades at a compelling valuation and offers an attractive play to gain exposure to a rapidly growing and increasingly validated MASH market," Leerink analyst Thomas Smith wrote this month, setting a $12 share price target.

ANALYSTS TURN BULLISH

Swiss bank UBS has raised its target to $12 from $3, while Dutch wealth manager Van Lanschot Kempen initiated coverage of Inventiva with a "buy" and a price target of $16. All 10 houses covering the stock rate it either "buy" or "strong buy", LSEG data showed.

Even after this year's surge, which has pushed Inventiva's market cap to around $1.3 billion, the company, listed on Nasdaq and Euronext, still trades at around $7 a share, well below most analysts' targets.

The share price surge has attracted the attention of investors beyond healthcare-focused specialists.

Carlo Franchini, head of institutional clients at Italy's Banca Ifigest, said Inventiva's small size and advanced clinical stage could attract interest from rivals, but said the stock's low liquidity made it more volatile.

"With a market cap this low, someone might take a punt," he said.

INVENTIVA KEEPS EYE ON FUNDING OPTIONS

Lanifibranor remains a make-or-break asset for the company, so a lot is riding on the outcome of the Phase 3 readout. But a positive outcome would still require more funding to bridge the gap to launch.

"Investors should anticipate dilution from further financing activity prior to reaching profitability," Leerink wrote.

CEO Obenshain, a veteran healthcare industry executive, said that Inventiva, like any other late-stage biotech, continuously evaluates options to fund strategy and milestones.

Inventiva has said it has enough cash to cover operations until the first quarter of 2027.

Competition in MASH could intensify as more drugmakers push candidates into late-stage testing. But analysts said the market is likely to be large enough to accommodate multiple therapies.

Cases are estimated to rise to around 23 million, or 7.9% of the U.S. adult population in 2050, from 14.9 million in 2020, Kempen said.

(Reporting by Danilo Masoni; Editing by Amanda Cooper and Jane Merriman)

((Danilo.Masoni@tr.com; Reuters Messaging: danilo.masoni.thomsonreuters.com@reuters.net/))