UPDATE: J.P. Morgan Downgrades Synageva BioPharma Corp. to Neutral, Lowers PT on Challenges Ahead

In a report published Friday, J.P. Morgan analyst Geoff Meacham downgraded the rating Synageva BioPharma Corp.

from Overweight to Neutral, but lowered the price target from $57.00 to $50.00. In the report, Meacham noted, “We are downgrading Synageva to Neutral from Overweight and decreasing our price target to $50 (prior $57). Of note, we continue to like the Synageva story long-term and believe data to date for sebelipase alfa (SBC-102) is not only de-risking for the asset itself, but the overall technology platform as well. However, more near-term, our concern is enrollment challenges related to the ongoing phase 3 trial ARISE trial of sebelipase alfa in late-onset LAL Deficiency (the key value driver of GEVA shares), as 1) we believe awareness of the disease is fairly low, even among specialists, so patient identification could take a bit longer and 2) IRB approval timelines can be variable (currently only 8/48 sites open for recruitment). As such, we now believe ARISE data are more likely to be available in the 2015 timeframe with potential sebelipase alfa launch in 2016 (as opposed to having revenues in the 2015, which we originally modeled). Overall, while we believe sebelipase alfa has ultimate blockbuster potential, we anticipate enrollment hurdles are likely to keep GEVA shares range-bound for the next 12 months. Hence, we are moving to a Neutral rating.” Synageva BioPharma Corp. closed on Thursday at $45.79.