Trevi's JAMA Publication Confirms Phase 2b Efficacy, Yet Regulatory and Valuation Risks Remain Elevated

What happened

Trevi Therapeutics announced the publication of its Phase 2b CORAL trial data for nalbuphine ER in the Journal of the American Medical Association, highlighting statistically significant reductions in 24-hour cough frequency across all dose groups by Week 6. The data show early efficacy at Week 2, with over 60% of treated patients achieving at least a 50% reduction, and patient-reported outcomes consistent with objective monitoring. This peer-reviewed validation enhances the drug's scientific credibility and may bolster investor confidence ahead of regulatory discussions. However, the DeepValue report indicates Trevi trades at a ~$1.4B market cap, already discounting high success probabilities despite being pre-pivotal and facing significant risks. The key near-term catalyst is FDA End-of-Phase 2 feedback, which will determine the Phase 3 design and potential strain on cash runway.

Implication

Peer-reviewed publication in a prestigious journal like JAMA adds legitimacy to Haduvio's Phase 2 data, potentially improving regulatory optics and supporting future trial designs. However, this event does not address the core investment risks: the FDA's post-gefapixant skepticism could still mandate more extensive Phase 3 trials, increasing costs and delaying timelines beyond current expectations. Trevi's cash runway into 2028 provides a buffer, but any design inflation or operational slippage might necessitate dilutive financing, given the single-asset focus and high burn rate. The stock is already crowded with bullish sentiment and clustered analyst targets, leaving limited upside without flawless execution and favorable regulatory outcomes. Investors should maintain a cautious stance, prioritizing upcoming regulatory feedback over incremental data releases, as the risk-reward remains compressed at current levels.

Thesis delta

The publication adds scientific validation to Haduvio's efficacy, which may slightly improve regulatory perceptions and investor sentiment. However, it does not alter the fundamental thesis that Trevi is overvalued relative to its pre-pivotal status, with significant risks from FDA hurdles, competition, and dilution potential. Thus, the DeepValue 'POTENTIAL SELL' recommendation remains unchanged, emphasizing capital preservation until Phase 3 clarity emerges.