Expect More Downside In Axovant Sciences

Axovant Sciences LtdAXONfailed to meet

Investors thinking Axovant's stock can't see any additional downside after a 70-percent drop should consider what analysts at Chardan Capital Markets have to say. The firm's Gbola Amusa maintains a Sell rating on Axovant's stock with an unchanged $3 price target. Axovant said it will no longer develop its intepirdine therapy after the disappointing phase 3 trial results, the analyst commented in a research report. Looking forward there are multiple events ahead including top-line results from the 269-patient HEADWAY Dlb trial of intepirdine in dementia and other studies that are "unlikely to support" the stock's price performance at current levels

Related Links: Analyst Says Axovant's Bull Case Is Effectively Over Axovant Fails To Pull The Sword From The Stone; Alzheimer's Drug Fails

"We believe that for HEADWAY DLB to in fact be a registration study, HEADWAY DLB needs to show an intepirdine efficacy signal so strong that the probability of such a signal is extremely remote," Amusa wrote.

The analyst also highlighted a few other concerns, including:

• "HEADWAY DLB has far less power than MINDSET, yet is still testing intepirdine for cognition and function in dementia patients."
• "To us, MINDSET, along with late-stage trials for idalopirdine and PF-05212377, were a test (and a failure) of the acetylcholine hypothesis on 5HT6 antagonist use in dementias to improve cognition and/or function."
• "We note a lack of convincing support that 5HT2A antagonism, on top of 5HT6 antagonism, by intepirdine should affect outcomes in DLB."

At time of publication, shares of Axovant Sciences were up roughly 3 percent at $7.96.