Key insights
- Lucid Capital downgraded Passage Bio (PASG) to Neutral due to funding concerns for its pivotal study of PBFT02 for frontotemporal dementia. The company is burning through cash, raising doubts about its ability to finance the trial despite positive clinical data. Other firms like Baird and Oppenheimer have given outperform ratings, viewing the stock's decline as an overreaction.
Investing.com - Lucid Capital Markets downgraded Passage Bio Inc. (NASDAQ:PASG) to Neutral from Buy and cut its price target to $9.00 from $68.00. The stock currently trades at $8.36 with a modest market cap of $28 million.
The downgrade follows updated data from the company’s ongoing Phase 1/2 upliFT-D clinical trial evaluating PBFT02 for the treatment of frontotemporal dementia with granulin mutations.
Passage Bio also shared feedback from a recent Type C meeting with the FDA regarding the likely registrational pathway for PBFT02 in FTD-GRN.
Lucid Capital Markets analyst Elemer Piros cited uncertainty about whether the company will have the financial resources to underwrite the pivotal study as the reason for the downgrade. The concern appears well-founded, as InvestingPro data shows the company burning through approximately $32 million in cash over the last twelve months. An InvestingPro Tip notes the company is "quickly burning through cash," though it maintains a current ratio of 2.07 and holds more cash than debt on its balance sheet.
The firm set a 12-month price target of $9 per share for the biotechnology company.
In other recent news, Passage Bio Inc. announced updated data from its Phase 1/2 clinical trial, upliFT-D, which evaluates the PBFT02 treatment for frontotemporal dementia with granulin mutations. The company reported that patients receiving PBFT02 showed a 64% reduction in whole brain atrophy at 12 months compared to untreated patients from the ALLFTD natural history data. Specifically, PBFT02-treated patients exhibited 3.1% atrophy versus 8.7% in the natural history sample. In addition to these clinical developments, Passage Bio received positive attention from financial analysts. Both Baird and Oppenheimer initiated coverage on the company’s stock with an outperform rating and set a price target of $30.00. The firms noted that the stock’s 39% decline this year is seen as an overreaction to competitor program failures. These developments highlight significant recent progress and interest surrounding Passage Bio.
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