Ziopharm Oncology Downgraded By BMO As 'Questions Persist'

In a report published Monday, BMO Capital analyst Jim Birchenough downgraded the rating on

to Market Perform, while lowering the price target to $10, "following an updated review of recent progress and relative positioning of CAR-T and TCR-based therapies." The analyst expressed optimism regarding the company's ability to compete in the adoptive cellular therapy (ACT) market and the credentials of CEO Dr. Lawrence Cooper. On the other hand, the BMO Capital report also said, "[W]e believe that timelines for identifying a competitive CAR-T or TCR program are unclear and that better resourced competitors are multiplying and increasing their lead. Overall, significant de-risking lies ahead, and we believe that a higher discount rate is warranted to reflect that risk." A review of the key developments in the company's ACT platform in cancer, along with the CAR-T, TIL and TCR programs, revealed that data for the first generation CD19 targeted CAR-T was "underwhelming," as compared to the hematologic malignancy competition. However, the CEO expressed optimism regarding an enhanced CAR-T that could support better "durability of effect." "While no specifics were discussed, ZIOP acknowledged the need to establish clinical comparability with a CD19 CAR-T while advancing a potentially more broadly applicable CAR-T targeting ROR1," Birchenough reported. The company is currently focused on advancing its ovarian and lung cancer programs, with enhanced ROR1 CAR-T, although the timelines are still unclear.