Leerink downgrades Epirus Biopharma to market perform

Leerink Partners has downgraded Epirus Biopharmaceuticals (NASDAQ:PRS) to “market perform” from “outperform” and slashed its price target to 75 cents from $10. The stock closed at 78 cents on Friday.

Analyst Jason Gerberry writes that the downgrades follows a change in senior management, suspension of Eprius’ lead program and a strategic change to prioritize the company’s rare disease biosimilars, which are currently in preclinical development.

Given market conditions, he said Epirus would focus on rare disease biosimilars and look to sell its Phase 3 biosimilar, Remicade.

“While we see the logic in a cash-constrained company targeting less expensive programs with fewer competitors, we expect the stock to trade at or below cash value of about 75 cents as Epirus is multiple years away from completion of biosimilar development, and ongoing programs face commercial risk from innovator company life cycle management,” Mr. Gerberry said.

In addition, he said the company has about $19-million of cash, enough to fund a few months of operations.