UPDATE: Credit Suisse Downgrades Vital Therapies Inc On Valuation

In a report published Wednesday, Credit Suisse analyst Bruce Nudell downgraded the rating on Vital Therapies Inc VTL from Outperform to Neutral, but raised the price target from $16.00 to $25.00. In the report, Credit Suisse noted, “VTL shares have increased to $23 from $12 since its IPO despite a lack of news flow. The company's US pivotal trial in alcohol-induced liver decompensation (AILD), VTI 208, is on track to complete enrollment by 12/14 (data 1H15); however, until VTI 208 data are available, clinical trial/approval risk remains (given the limited extracorporeal liver assist device [ELAD] data to date). "Thus, while we don't have reason to suspect that the VTI-208 data will be very different than the phase 2b VTI-206 experience (~25% 90 day absolute mortality benefit, N = 29), we are downgrading to Neutral given our belief that favorable clinical data will be required for meaningful upside & our further belief that an absolute mortality benefit in VTI-208 of much below 20% (the level below which approvability is likely to come into doubt) could drive downside. Based on our conversations with key opinion leaders (KOL), we believe the ELAD has merit in treating AILD patients & very well could show sufficient treatment effect to garner approval (we place likelihood of approval at ~70%); however, we do not see the current risk/reward as favorable enough to recommend the stock.” Vital Therapies closed on Tuesday at $23.01.