Stifel cuts CymaBay to hold; PT to $4 from $14

Stifel downgraded CymaBay Therapeutics (NASDAQ:CBAY) to “hold” from “buy” and slashed its price target to $4 from $14 after the company halted development of its sole value driver, seladelpar. The stock closed at $5.55 on Nov. 22.

The company terminated its Phase 2b study of seladelpar in subjects with non-alcoholic steatohepatitis (NASH) and its recently initiated Phase 2 study of seladelpar in subjects with primary sclerosing cholangitis (PSC).  In addition, the company is putting on hold all studies of seladelpar in subjects with primary biliary cholangitis (PBC).

Analyst Derek Archila writes that CymaBay’s decision was driven by “atypical histology findings” in the Phase 2b NASH study. 

“Given the halt is due to safety, it is hard for us to remain constructive on seladelpar, particularly as we viewed seladelpar’s potential benign safety profile as a key differentiator,” he added.

Mr. Archila had assigned a value of about $10 a share for seladelpar, “which we are now removing from our model. We think the stock likely trades at or below cash of about $3 a share, given that the rest of CymaBay’s pipeline is very early in development.”

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