Neumora Therapeutics Stock Downgraded to Sector Perform from Outperform
RBC Capital has downgraded Neumora Therapeutics (NMRA) to Sector Perform from Outperform with a price target of $4, following the disappointing results of the company’s lead drug navacaprant in a Phase 3 trial for major depressive disorder. The analyst firm had previously expressed optimism about the potential of navacaprant, but the failure of this trial has raised concerns about its prospects.
Promising Preclinical Data and Study Variability
Prior data from both Neumora Therapeutics and Johnson & Johnson (JNJ) had suggested that navacaprant showed promise in preclinical studies for major depressive disorder. However, the analyst acknowledges that study results can sometimes be inconsistent, and therefore, the door remains open for potential future success.
Disappointing Trial Results
The Phase 3 trial of navacaprant was well-conducted, but it failed to provide a significant signal in terms of efficacy. This has made it difficult for the analyst to have conviction about the drug’s prospects, particularly with regards to additional Phase 3 readouts this year.
Implications for Navacaprant and Neumora Therapeutics
The downgrade by RBC Capital suggests that the company’s lead drug may not be as successful as initially thought. This is a significant blow to the bull case for Neumora Therapeutics, which had been riding high on the prospects of navacaprant.
Market Impact
The downgraded stock has already taken a beating in recent trading, with the share price plummeting after KOASTAL-1 missed endpoint. Investors should exercise caution when considering investments in Neumora Therapeutics at this time.
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