AMTI - Applied Molecular drops 16% as JMP downgrades on trial setback

• Nano-cap biotech Applied Molecular Transport ( NASDAQ: AMTI ) lost ~16% pre-market Friday after JMP Securities downgraded it to Market Perform from Outperform, citing a setback for its Phase 2 trial for oral ulcerative colitis candidate AMT-101.
• On Thursday, the South San Francisco, California-based biotech said that the LOMBARD monotherapy trial failed to meet the main goal indicating similar clinical remission rates between AMT-101 and placebo arms at Week 12.
• Given the uncertainty ahead, JMP has removed AMT-101 from its valuation model for the company. The analysts think the stock is fairly valued, trading at about two-thirds of a discount to estimated year-end cash.
• With ongoing pressure on equity markets and biotech space, JMP argues that the discount is consistent with that of the peer group as many companies trade below cash amid pipeline risk.
• Wall Street has remained bullish on Applied Molecular ( AMTI ) stock, with an average rating of Buy from analysts. However, Seeking Alpha's Quant System, which consistently beats the market, rated AMTI as a Strong Sell.

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