** Brokerage H.C. Wainwright starts coverage of drug developer Palvella Therapeutics PVLA.O with "buy" rating and PT of $38 - a 3x upside to Tuesday's close

** Co is testing a topical form of rapamycin called Qtorin in late-stage studies to treat two rare and chronic skin diseases called microcystic lymphatic malformations and cutaneous venous malformations

** There is a high unmet need because no approved therapies exist for these conditions - H.C. Wainwright

** Brokerage says Palvella's formulation addresses critical limitations of other forms of the drug, such as poor skin penetration, systemic toxicity, and chemical instability

** Says doctors have expressed optimism about the potential for a topical rapamycin therapy, as current treatments such as lasers, surgery or off-label medicines are either ineffective or only provide temporary relief

** Late-stage data from one of the trials is expected in early 2026 and brokerage says the drug could be launched by 2027

** Also expects sales of Qtorin rapamycin to grow to $381 million by 2034

** As of last close, stock down ~19% YTD

(Reporting by Kamal Choudhury in Bengaluru)

((Kamal.Choudhury@thomsonreuters.com;))