HCW cuts Applied Genetic price target to $8

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H.C. Wainwright slashed its price target for Applied Genetic Technologies (NASDAQ:AGTC) to $8 from $16 but maintained its “buy” rating after the company posted financing results below consensus for the fiscal year ended June 30, 2017 and updated its clinical programs.

Shares of Applied were quoted at $4.02, down 92 cents, or 19%, in afternoon trading on Sept. 13.

Analyst Joseph Pantginis writes that factors affecting the price target cut include a change in the projected launch year for X-linked retinoschisis (XLRS) and achromatopsia caused by mutations in the CNGB3 gene from 2022 to 2023, and an increase to the discount rate from 15% to 20% “to account for what we perceive to be the increased risk around the lead XLRS program.”

The XLRS program has completed enrollment of 12 patients in the dose escalation portion of the Phase 1/2 study. The company said that due to patient variability, a larger number of patients would need to be enrolled and followed for six months in order to evaluate biological activity and to identify a trend.

Mr. Pantginis said that up until this morning's call, the expectation was that the company would provide first-in-man clinical data from the XLRS study this month.

“This is now not the case, and we believe today's XLRS update should have two primary impacts on investor sentiment, including increased frustration and anticipation for data because the timeline has been pushed out to approximately mid-2018 for the potential data; and may lead to an increase in investor circumspection since today's announcement also included the statement that no biological activity has been seen in any patients tested to date,” he said.

“This last factor, of course, comes with the caveat that more patient numbers and follow up times are required for the study,” he added.