Research Capital downgrades Bellus Health on valuation, financing

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Research Capital downgraded Bellus Health (NASDAQ:BLU) to “hold” from “speculative buy” and removed its previous $14.50 price target so “we can properly account for the new dilution” from a $153-million offering of new shares.

Shares of Bellus were quoted at $9.35, down 73 cents, after the opening on July 14.

Analyst Andre Uddin, Ph.D., writes that the stock is up 272% since Research Capital’s upgrade on July 23, 2021 and upgrades and downgrades on Bellus have generated a total return of 1649%.

“We believe management continues to do a great job developing BLU-5937 and we remain bullish on its future prospects,” he added.

Dr. Uddin said Bellus’ Phase 3 program evaluating BLU-5937 for the treatment of refractory recurrent cough are expected to begin in the fourth quarter of 2022. The Phase 3 trials will be composed of two pivotal trials: CALM-1 and CALM-2, each evaluating the efficacy, safety and tolerability in approximately 675 adults with refractory recurrent cough. Topline data from CALM-1 are expected in the second half of 2024.

Dr. Uddin also pointed to several clinical development with three other competitors in the refractory recurrent cough race, which “could potentially position BLU-5937 to be both first-in-class and best-in-class.”