UPDATE: Brinson Patrick Downgrades ZIOPHARM Oncology to Market Perform on Palifosfamide Failure

In a report published Wednesday, Brinson Patrick analyst Vernon Bernardino downgraded the rating on ZIOPHARM Oncology

from Market Outperform to Market Perform, and lowered the price target from $7.00 to $1.50. In the report, Bernardino noted, “Earlier today, ZIOPHARM announced PICASSO 3, its Phase III clinical trial with palifosfamide in metastatic soft tissue sarcoma (mSTS), did not meet its primary endpoint. Based on sum-of-the-parts methodology, we derived a valuation for ZIOP of $1.50 per share. Our scenario analyses had derived a valuation for ZIOP ranging from $4.42 to $10.60, with prices around $4, in our view, reflecting failure of palifosfamide in PICASSO 3. With today's pullback, we believe current prices reflect fair value. As a result, we downgrade ZIOP to Market Perform from Market Outperform and decrease our 12-month price target to $1.50 from $7.00.” ZIOPHARM Oncology closed on Tuesday at $1.82.