Avalanche Bio Downgraded At William Blair, Firm Says Phase IIb 'A Ways Away'

In a report published Tuesday, William Blair analyst Tim Lugo downgraded the rating on

from Outperform to Market Perform, while maintaining the price target at $24, after the company reported the top-line results of its Phase IIa trial and the 36-month follow-up from its Phase I study. "The Phase IIa trial, which was powered for safety and tolerability, met the primary endpoint with no serious adverse events related to therapy observed and all adverse events related to study drug were mild or moderate and resolved within 60 days," analyst Tim Lugo said. Investors were primary concerned, however, with the secondary efficacy endpoints related to visual acuity, number of rescue injections, and retinal thickness. Lugo stated that these exhibited mixed results. Avalanche Biotech could provide detailed results at AAO in November and clarity on a potential development deal with

for rights to AVA-101 in the near term. "However, we believe the performance of Lucentis in the control arm raises more questions than answers," Lugo added. In the report William Blair noted, "While the next major catalyst for shares is a potential deal between both Regeneron and Avalanche, it is likely beneficial for both parties to wait until Phase IIb results to enter discussions as both parties (and the market) will likely have difficulty in valuing AVA-101 as an asset until additional results are available."