HGEN - JP Morgan cuts Humanigen to underweight on FDA lenzilumab EUA rejection; shares drop 50%

JP Morgan has cut Humanigen (HGEN -49.0%) to underweight from neutral and is withdrawing its price target after the FDA declined the company's request for an Emergency Use Authorization for lenzilumab for hospitalized COVID-19 patients. Analyst Eric Joseph said he wasn't that surprised with the decision given lenzilumab's modest benefit compared to other therapies that have received EUAs, such as tocilizumab and baracitinib. Lenzilumab was also priced at a premium to tocilizumab: $10K for a therapy course compared to ~$4K. "We see little potential for lenzilumab commercialization in the US within the next six to nine months via EUA, and similarly low approval prospects via BLA," Joseph writes. He adds that Humanigen has a cash runway between three and six months and "negative read-through implications on the UK and EU regulatory fronts."

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JP Morgan cuts Humanigen to underweight on FDA lenzilumab EUA rejection; shares drop 50%