EQRX - EQRx extends post-earnings slump as Goldman Sachs Jefferies downgrade
EQRx, Inc. ( NASDAQ: EQRX ) sold off for the second straight session on Friday as Goldman Sachs and Jefferies downgraded the cancer-focused biotech in reaction to the pipeline updates the company shared with its Q3 2022 financials yesterday.
Following regulatory feedback, EQRx ( EQRX ) has discontinued its development plan for the cancer regimen sugemalimab plus chemotherapy for stage IV non-small cell lung cancer.
The updates also include a decision to prioritize the development of aumolertinib and lerociclib as a combination regimen for lung, breast, and other cancers.
Updating their model on EQRx ( EQRX ) after the announcements, Goldman Sachs analysts led by Chris Shibutani downgraded the stock to Neutral from Buy and slashed the price target to $5 from $8 per share on Friday.
However, the analysts have favorable views on the company’s strong cash position and cash runway that extends to 2028 from 2025 in the previous forecast.
Meanwhile, Jefferies analyst Akash Tewari lowered the rating on EQRx ( EQRX ) to Hold from Buy, arguing that the company “has been a frustrating name for investors thus far.”
With its Q3 updates on Thursday, EQRx ( EQRX ) pledged to adopt market-based pricing for lead assets aumolertinib and lerociclib in the U.S. Tewari, who lowered the price target on the stock to $3.20 from $5.60 noted that the company’s commitment to shake up drug pricing has failed.
“While certainly well-intentioned re: disrupting price on oncology/immunology drugs, its regulatory strategy using Chinese data to support an FDA filing simply has failed to yield results,” the analyst wrote.
Read: Seeking Alpha contributor Derek Lowe was among skeptics when EQRx ( EQRX ) announced plans to revamp pharma pricing and drug discovery.
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EQRx extends post-earnings slump as Goldman Sachs, Jefferies downgrade