Celgene Corp. was downgraded to neutral at Baird Equity Research on Friday after the drugmaker abandoned three Crohn’s disease drug trials late Thursday. Baird analyst Brian Skorney also lowered the company’s price target by 16% to $136. Celgene shares, which closed at $135.96 on Thursday, dropped 5.9% in premarket trade Friday. Skorney said the downgrade was based on removing Celgene’s GED-0301 from his model and on lower “prospects for long-term growth, as pressure to succeed in [inflammation and immunology] is now almost exclusively on ozanimod,” which Celgene is developing for relapsing multiple sclerosis, ulcerative colitis and Crohn’s disease. Celgene said late Thursday that is it still waiting to review full data from a mid-stage trial of GED-0301 in ulcerative colitis, but “we believe the drug’s target, SMAD7, has more mechanistic rationale in Crohn’s, not UC,” Skorney said, adding, that the “high-profile GED-0301 failure has potential to call into question the pipeline.” Celgene shares have dipped 0.3% over the last three months, compared with a 3.6% rise in the S&P 500 .
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