Annexon off 58% after setback for eye disease candidate; JPMorgan downgrades
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Annexon (NASDAQ:ANNX) shares lost ~58% in the morning hours Thursday to hit a new 52-week low after the company’s geographic atrophy candidate ANX007 failed in a Phase 2 trial. JPMorgan downgraded the biotech in reaction.
Citing topline data from its ARCHER trial, the Brisbane, California-based company said that the study’s primary endpoint of the mean rate of change in the GA lesion area did not reach statistical significance compared to a control.
However, there was a statistically significant reduction of vision loss over the 12-month treatment period in terms of the widely accepted functional endpoint of best corrected visual acuity (BCVA) measured from the baseline.
JPMorgan analyst Malcolm Kuno downgraded the stock to Neutral from Overweight, noting that the readout was mixed given the drug’s failure to indicate statistically significant benefit in GA lesion area reduction but its impact on visual function gains.
Ponting out that ANNX is moving ahead with regulatory discussions to advance ANX007 further, Kuno argued, “We continue to see a high bar to justify spending additional resources on this program.”
The analyst removes the ANX007 for GA in the firm’s model for ANNX and slashes his price target to $9 from $19 per share.
However, Cantor Fitzgerald defended the stock reiterating the Overweight rating and $18 per share target. As the reason for his decision, analyst Pete Stavropoulos cited the impact of ANX007 on the functional outcome measured by BCVA.
“In our view, these data show a clear signal of activity and support the movement into later-stage studies, following a meeting on “next steps” with the FDA,” Stavropoulos wrote.