Maxim Group reduced price targets for five biotech stocks, citing data troughs, financing conditions and political factors, which may be further compounded by a lack of catalysts and increasing operating expenses, pushing valuations to the low end of the 52-week range.
In addition, as the U.S. moves into the presidential election cycle, discussions around drug pricing have also pressured healthcare-focused stocks, writes analyst Jason McCarthy.
His price cuts include:
Abeona Therapeutics (NASDAQ:ABEO) has delayed several drug candidates, which has extended his model to 2029 from 2025. He reduced his price target to $14 from $26. The stock closed at $4.40 on July 8.
Adams Pharmaceuticals (NASDAQ:ADMP) also has delayed several drug candidates as it concentrates efforts on naloxone. The company also needs to raise capital. He took his price target to $6 from $10. The stock closed at $1.29 on July 8.
Mr. McCarthy increased the risk for Actinium Pharmaceuticals’ (NYSE American:ATNM) lomab-b AML trial to 50% from 30%. In addition, he factored in dilution from a prior financing, which in part pushed the stock’s valuation to the low end of the 52-week range. Combined with other minor adjustments, he reduced his price target to $1.50 from $3. The stock closed at 24 cents on July 8.
Sophiris Bio (NASDAQ:SPHS) has a lack of catalysts ahead of plans for a Phase 3 program in prostate cancer. Mr. McCarthy figures the company will need a partner or will have to raise capital to fund the trial. He reduced his price target to $4 from $6. The stock closed at 93 cents on July 8.
Mr. McCarthy increased the risk for Vistagen Therapeutics’ (NASDAQ:VTGN) major depressive disorder program to 50% from 30%. Data from the company’s ELEVATE Phase 2 study is expected in the second half of 2019. Updates for pipeline programs may require additional capital. His price target falls to $4 from $6. The stock closed at 68 cents on July 8.