Oppenheimer’s Bullish Stance on Aquinox Pharmaceuticals (AQXP) Comes to an End


Wednesday turned out to be a nightmare for shareholders of Aquinox Pharmaceuticals (NASDAQ:AQXP), after the drug maker disclosed that the primary endpoint, the change from baseline in maximum daily bladder pain, was not met in the Phase 3 LEADERSHIP-301 trial evaluating once-daily, oral rosiptor. As a result, the company announced that all development of rosiptor would be discontinued, including the Phase 2 trial in subjects with chronic prostatitis/chronic pelvic pain syndrome, sending shares collapsing 85%.

Adding insult to injury, Cantor analyst William Tanner downgraded Aquinox shares from Overweight to Neutral, while slashing the price target from $28.00 to $2.00, which reflects a potential downside of 14% from last closing price.

Tanner commented, “We acknowledge that changes to our model may be somewhat lacking in fidelity given the uncertainty of next steps for the company, other than discontinuing rosiptor development. AQXP reported a cash balance of $93 million and the company received $25 million from a partnership with Astellas to develop rosiptor in the Asia-Pacific region. We had forecast a 2Q18 cash balance of $105 million and have adjusted our 2H18 model to reflect baseline post-restructuring operating expenses of about $32 million per year, which results in a 2019 year-end cash balance of approximately $58 million. We are opting to use this as our valuation basis for the company, which yields a valuation estimate of $2 per share.”

According to TipRanks.com, which measures analysts’ and bloggers’ success rate based on how their calls perform, analyst William Tanner has a yearly average return of 9.0% and a 56.5% success rate. Tanner has a -1.7% average return when recommending AQXP, and is ranked #688 out of 4822 analysts.

Out of the 4 analysts polled in the past 12 months, 3 rate Aquinox Pharmaceuticals stock a Buy, while 1 rates the stock a Hold. With a return potential of 942%, the stock’s consensus target price stands at $24.33.

Aquinox is a pharmaceutical company developing novel therapeutics for conditions marked by inflammation, inflammatory pain, and blood cancers.

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