Leerink Partners has downgraded Trovagene (NASDAQ:TROV) to “market perform” from “outperform” and lowered its price target to $4.50 from $8, following the recent removal/departure of key senior management. The stock closed at $4.73 on Monday.
“While we remain intrigued by Trovagene’s opportunity in liquid biopsy, a large part of our investment thesis rested on the odds that Trovagene’s leadership could successfully execute on this opportunity,” writes analyst Dan Leonard. “We believe the announced leadership transitions could prove disruptive.”
On Monday, the company announced the appointment of a new CEO and the resignation of its chief commercial officer. This departure follows the employment termination of the CEO and CFO announced last month.
“Not only has our confidence eroded following the announced turnover, but we’re not confident the turnover is complete,” Mr. Leonard said. Several other members of senior leadership have long-standing ties to the departed executives and could reconsider their options, he added.