Editas Medicine Downgraded by Truist and Stifel Following Strategic Shift
Truist and Stifel have downgraded Editas Medicine, Inc (NASDAQ:) to “hold” from “buy”, citing a lack of near-term catalysts. Shares of the gene-editing company plummeted 23% to $1.45 on Friday after the company announced a strategic shift, ending the development of reni-cel and cutting its workforce by 65%.
The company will now focus entirely on in vivo therapeutic development, with clinical proof of concept expected at least two years away. While Editas presented preclinical data supporting its in vivo approach for hematopoietic stem cells, Truist expressed concerns about competitive pressures and uncertainties surrounding the program.
Truist said it would stay on the sidelines due to limited value-creating opportunities within the next 12-18 months. “Despite an evolving clinical profile that looks favorable, EDIT’s decision to end development after extensive search did not yield a commercial partner is disappointing, and for us, pushes us to revisit our investment thesis in the stock,” wrote a Stifel analyst.
The price target for Editas was cut to $3 from $11 by Stifel, while Truist removed its price target altogether. The downgrades are a significant blow to the company, which is looking to refocus its efforts on in vivo therapeutic development.
