Adial Pharmaceuticals ( NASDAQ: ADIL ) stock fell ~3% on Aug. 17 after Maxim downgraded the stock to Hold from Buy citing need for capital after a trial of Alcohol Use Disorder (AUD) drug AD04 missed its main goal last month.
The SA Quant Rating on ADIL is Sell , which takes into account factors such as growth and profitability, among others things. The rating is in contrast to the average Wall Street Analysts' Rating of Strong Buy , wherein 2 out of 3 analysts tag it as a Strong Buy. YTD, the stock has shed ~79% , see chart here .
In July, the company's phase 3 trial , dubbed ONWARD, of AD04 in patients with AUD had failed to meet the main efficacy goal of the study by not achieving statistical significance among 'very heavy drinkers'.
Maxim analyst Jason McCarthy said that while there was positive data in the prespecified group of 'heavy drinkers', it would likely take some time and more capital for the company to map out the path forward with the FDA and EMA.
However, Adial CEO William Stilley was confident about AD04 and said in the Aug. 16 earnings release , "Nevertheless, given the strength of the data, especially the statistical significance among heavy drinkers, as well as the safety and tolerability of AD04, we have consulted with both key opinion leaders and our regulatory advisors. Based on the feedback, we strongly believe there is a clear path forward to regulatory submission, and we are more encouraged than ever about the potential for commercialization."
The company noted that as of June 30, it had cash and cash equivalents of $9.2M which is expected to provide sufficient runway to advance ongoing regulatory and partnering activities related to AD04, and advancement of its Purnovate platform.
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Adial gets cut at Maxim on need for capital to map path for alcohol disorder drug