ABSI - Absci sees double downgrade at JPMorgan on concerns over product mix

Despite over 14% rise in its share price on Thursday, JPMorgan has downgraded Absci Corporation ( NASDAQ: ABSI ), which runs a drug creation platform, to Underweight from Overweight, noting issues with its product mix.

Citing Absci's ( ABSI ) Q2 2022 financials, the analyst Julia Qin notes that the company has already exceeded its fiscal year target for drug discovery programs and reduced the capital expenditure and hiring to extend the cash runway by another year to 2025.

Qin welcomes the initiatives to save cash and the company's better than expected deal signing. However, the analyst is worried that Discovery Projects increasingly dominate Absci's ( ABSI ) product mix after management noted there were no standalone Cell Line Development Projects in the pipeline.

Despite their downstream economics, the Discovery Projects are linked to a lower probability of success and a longer time for revenue recognition resulting in "reduced revenue outlook and visibility over the medium term," the analyst added, withdrawing the price target on the stock.

Wall Street has remained bullish on Absci's ( ABSI ) stock, with an average rating of Buy from analysts , while Seeking Alpha's quant system, which consistently beats the market , rated ABSI as a Hold.

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