Sionna Therapeutics' (SION) valuation topping $2 billion is "too optimistic" as the company's early-stage cystic fibrosis program faces significant hurdles before proving itself in clinical trials, RBC Capital Markets said Thursday in a report.

Interest in Sionna has been fueled by hopes of major upside and the stock's perceived connection to widely held Vertex Pharmaceuticals (VRTX), and investor feedback to RBC's downgrade of Sionna on Monday to underperform from sector perform triggered "significant feedback," according to the report.

Sionna is developing small-molecule drugs designed to work alongside Vertex's widely used therapy Trikafta, aiming to improve outcomes for cystic fibrosis patients, the report said.

RBC cited variability in Sionna's human bronchial epithelial assays, where Trikafta's performance appeared weaker than in Vertex's published studies, raising questions about the reliability of Sionna's comparisons and the likelihood of clinical benefit.

Despite investor pushback, RBC maintained its underperform rating on Sionna stock with a $24 price target, well below the current market.

Sionna shares rose 1.4% in recent Thursday trading, and Vertex fell 0.7%.

Price: 41.72, Change: +0.56, Percent Change: +1.35