Jefferies has downgraded Finnish pharmaceutical company Orion to “hold” from “buy.” The brokerage believes the current valuation already reflects the positive outlook for Orion’s Nubeqa drug, used to treat prostate cancer. This leaves limited potential for further gains, according to the analysts. The downgrade emphasizes valuation concerns rather than any immediate shifts in performance.

Jefferies increased its estimate for the peak sales of Nubeqa to €4.6 billion, up from €4.2 billion, yet stated this doesn't significantly alter the risk-reward profile in the near term. Patent-related risks also weigh on the outlook. Competition from generic versions of Xtandi is expected from 2028. Nubeqa's U.S. patent expires in 2033, with potential extension to 2037.

The downgrade followed Phase II setbacks in Orion's development pipeline, decreasing confidence in research productivity. The brokerage also noted Orion's dividend yield is lower than the broader market. Despite strong fundamentals for Nubeqa, Jefferies concludes the upside potential is capped, leading to a neutral risk-reward balance for investors, given the valuation and pipeline constraints.