Axovant Sciences Ltd (NASDAQ:AXON) reported this morning that the highly-anticipated pivotal phase 3 MINDSET trial of intepirdine in Alzheimer’s Disease (AD) failed to meet its co-primary endpoints of change in ADAS-Cog and ADCS-ADL, sending shares tumbling over 70%.
In reaction to the clinical setback, Oppenheimer analyst Jay Olson downgraded shares of Axovant Sciences from Outperform to Perform, while withdrawing the price target. (To watch Olson’s track record, click here)
Olson commented, “Today’s failure is a major disappointment for AD patients and a setback for AXON, but nelotanserin and a potential deal could help AXON get back on track […] While we had previously predicted an $11 floor in AXON shares consisting of $8 for nelotanserin and $3 of cash, the company plans to deploy cash for business development to rebuild its pipeline. We prefer to hold off assigning value to cash until we see specific assets brought into the pipeline and, therefore, withdraw our $30 price target at this time.”
“Intepirdine still has a Ph2b trial (HEADWAY) in DLB with data expected by YE17. The dose is higher in this indication, and DLB is a fundamentally different disease from AD. For this reason, read-across from MINDSET’s CIBIC+ score, which despite being statistically significant, achieved only 1/3 of donepezil activity, is not warranted. We remove intepirdine in DLB from our model,” the analyst continued.
Out of the 8 analysts polled by TipRanks (in the past 3 months), 5 rate Axovant stock a Buy, 2 rate the stock a Hold and 1 recommends a Sell. With a return potential of 307%, the stock’s consensus target price stands at $25.75.