On Wednesday, Canaccord Genuity adjusted its price target on shares of CervoMed (NASDAQ:CRVO) to $12.00, a significant decrease from the previous target of $65.00. The stock, currently trading at $2.16, has fallen nearly 80% from its 52-week high of $26.38. Despite the reduction, the firm maintains a Buy rating on the stock.
According to InvestingPro data, the stock's RSI indicates oversold conditions, suggesting potential for a technical rebound. CervoMed recently disclosed top-line results from its Phase 2b trial for neflamapimod, a potential treatment for dementia with Lewy bodies (DLB). The drug failed to meet the primary or secondary endpoints of the trial, which evaluated efficacy at 16 weeks.
The trial aimed to demonstrate the drug's effect on early-stage DLB patients, identified using a biomarker-based approach. The unexpected outcome was partly attributed to insufficient plasma drug concentrations during the trial period. Full data from the trial is anticipated in January 2025, with additional results from an ongoing open-label extension expected by late second quarter of 2025.
CervoMed's stock has experienced a roughly 80% decline following the trial results. The company has decided to halt the planned Phase 3 activities for 2025 as it investigates the reasons behind the trial's outcome. This decision, along with the recent stock price drop, implies that the company's cash reserves should last until mid-2026. InvestingPro analysis shows the company maintains a strong liquidity position with a current ratio of 15.04, and importantly, holds more cash than debt on its balance sheet.
Investors and analysts are looking forward to potential insights from the open-label extension, which may include data from patients who received the drug from a different manufacturing batch. There is also anticipation for the results of a French Phase 2a trial, which is testing a different dosing regimen of neflamapimod in patients with mild cognitive impairment. These forthcoming data sets could provide clues to the drug's efficacy and optimal dosing strategy.
InvestingPro subscribers can access 15 additional investment tips and comprehensive financial metrics to better evaluate CervoMed's potential amid this crucial period.
In other recent news, CervoMed has experienced several significant developments following disappointing clinical trial results for its drug, neflamapimod. Morgan Stanley (NYSE:MS) downgraded the company's shares from Equalweight to Underweight, citing that the Phase 2b RewinD-LB study did not meet primary and secondary endpoints.
Chardan Capital Markets also adjusted its rating for CervoMed, downgrading the stock from Buy to Neutral, due to the same disappointing results from the RewinD-LB study. In addition, Brookline Capital Markets revised its stance on CervoMed, moving from a "Buy" to a "Hold" rating, while D. Boral (OTC:BOALY) Capital adjusted its stance from Buy to Hold. On a positive note, Roth/MKM initiated coverage on shares of CervoMed with a Buy rating and a 12-month price target of $45.00, based on the potential market impact of neflamapimod.
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