TALS - Talaris cut to neutral at Morgan Stanley on safety concerns for kidney transplant drug

• Morgan Stanley has downgraded Talaris Therapeutics ( NASDAQ: TALS ) to hold from buy amid late-stage results for its kidney transplant drug that indicate safety concerns.
• The firm has a $8 price target (~248% upside based on Friday's close).
• Despite the downgrade, shares are up 15% in Tuesday morning trading.
• On June 30, Talaris said that patients given FCR001, which is designed to wean individuals off chronic anti-rejection drugs, performed well in a phase 3 trial . However, three cases of graft-versus-host disease were reported.
• Analyst Vikram Purohit said the cases "could hinder eventual potential uptake," adding that the efficacy data was encouraging.

• "We believe that the currently reported safety profile could limit interest in the therapy from certain prescribers and patients," Purohit wrote.

• SVB Securities also recently downgraded Talaris Therapeutics to market perform from outperform.

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