SVB Leerink downgraded Gemini Therapeutics (NASDAQ:GMTX) to “market perform” from “outperform” and slashed its price target to $2 from $10, citing an unexpected leadership transition and corporate restructuring. The stock closed at $1.40 on March 2.
Gemini is developing novel therapeutic compounds to treat genetically defined age-related macular degeneration (AMD).
“It sounds like the company has decided to terminate lead product, GEM103, which is clearly disappointing news, as management previously planned to move forward to pivotal programs,” writes analyst Marc Goodman.
“With that said, it is not that surprising given limited and mixed data in the GEM103 Phase 2 GA study and that the Phase 2 AMD data were not disclosed,” he added.
“This may be the right strategic move for Gemini, but it will be a prolonged process for the company to turn things around, as the next product from the pipeline, GEM307, is still very early in the IND stage,” Mr. Goodman pointed out.
In addition, Georges Gemayel was appointed interim CEO, succeeding Jason Meyenburg, who transitioned to be an advisor to Gemini. The company also intends to reduce its workforce by 24 employees, or about 80%, by the end of the second quarter of 2022, with remaining employees focused on GEM307’s IND-enabling work. The company also initiated a process to evaluate strategic alternatives, which may result in potential transactions/deals, Mr. Goodman said.