Cantor Wary on Alcobra Ltd Following Phase III Trial Failure

Alcobra Ltd (NASDAQ:ADHD) disappointed investors today with the news that its MEASURE trial failed to meet its primary endpoint based on investigator assessment of the Conners’ Adult ADHD Scales (CAARS). On back of the miss, the biotech firm is terminating all development of Metadoxine Extended Release (MDX) for adult ADHD in the U.S. Considering this was ADHD’s sole development candidate, shares have been plunging 49% in the aftermath.

Cantor analyst Mara Goldstein is notably cautious on the firm’s prospects, particularly “given the FDA clinical hold and the previous clinical experiences” and therefore, asserts, “we are hard pressed to see a compelling path forward.” In reaction, the analyst reiterates a Neutral rating on shares of ADHD with a $2 price target, which represents a just under 106% increase from where the stock is currently trading.

Clearly, there are rough waters ahead for Alcobra, as the analyst speculates,”With news of the MEASURE study missing its primary endpoint, the path forward for ADHD shares is uncertain. […] MEASURE was evaluated on a population of 283 patients having at least one post-baseline efficacy assessment. The company’s cash is likely somewhere around $45 million by the end of 1Q17 (which we estimate would include wind-down costs for the MEASURE study), but without other pipeline candidates or a discovery effort, we think the next option is likely to involve a strategic opportunity.”

“The shares are likely to trade below cash, in our view, given the uncertainty of the strategic path forward for the company,” Golstein surmises.

According to TipRanks, which measures analysts’ and bloggers’ success rate based on how their calls perform, two-star analyst Mara Goldstein is ranked #2,848 out of 4,349 analysts. Goldstein has a 42% success rate and earns 0.0% in her annual returns. However, when recommending ADHD, Goldstein loses 65.0% in average profits on the stock.

TipRanks analytics indicate ADHD as a Hold. Out of 6 analysts polled by TipRanks in the last 3 months, 2 are bullish on Alcobra stock, 3 remain sidelined, and 1 is bearish on the stock. With a return potential of 104%, the stock’s consensus target price stands at $3.88.

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