- Centessa Pharmaceuticals ( NASDAQ: CNTA ) turned lower in the pre-market Friday after Morgan Stanley downgraded the clinical-stage biotech to Underweight from Overweight, noting the recent setbacks for the U.K. company's late-stage assets.
- Recalling that Centessa's ( CNTA ) late-stage pipeline candidates and the diversity of those assets underpinned the firm's previous bullish view on the stock, the analyst Matthew Harrison wrote: "We were clearly wrong on our assessment of the pipeline."
- The analyst points out that the company is discontinuing three late-stage assets, including two for trial failure and one to preserve capital.
- Morgan Stanley says that the downgrade reflects the lack of near-term upside for the stock and the need to wait for early-stage programs to advance before they can add meaningful value for shares.
- The price target halved to $5 per share implies the value for Centessa's ( CNTA ) late-stage Hemophilia B candidate SerpinPC, which, according to the analyst, is overshadowed by the ongoing cash burn.
- Read: In June, the company announced it would halt further development of its Phase 3 candidate lixivaptan for autosomal dominant polycystic kidney disease.
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Centessa draws double downgrade at Morgan Stanley on setbacks to pipeline