UPDATE: Piper Jaffray Downgrades Onconova Therapeutics as Lead Indication Failure Raises Doubts on Rigo

In a report published Thursday, Piper Jaffray analyst Charles C. Duncan downgraded the rating on

from Overweight to Neutral, and lowered the price target from $38.00 to $9.00. In the report, Piper Jaffray noted, “Onconova announced today that rigosertib (rigo) failed to meet its primary endpoint in high-risk MDS, despite a numerical survival benefit for the rigo arm. We are surprised by the result and are introducing a ‘probability of success' of 25% to our valuation, resulting in a $9 price target (from $38) and a Neutral rating. While a subgroup of previous SOC non-responders appeared to perform better, achieving a stat sig improvement in survival, we are wary of post-hoc subset analyses and believe that clarity from FDA on this analyses will not be forthcoming soon. Although oral Rigo continues forward with low-risk MDS, and the company plans to start Phase III ‘as soon as possible' we expect investors will need to see strong clinical progress for enhanced conviction in the platform.” Onconova Therapeutics closed on Wednesday at $13.86.