Roth cuts Tonix Pharma to neutral; PT $1

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Roth Capital Partners downgraded Tonix Pharmaceuticals (NASDAQ:TNXP) to “neutral” from “buy” with a price target of $1 after the company posted disappointing results from its interim Phase 3 analysis of Tonmya for the treatment of military-related posttraumatic stress disorder. 

Shares of Tonix were changing hands at $1.36, down $2.58, or 65% at midday on July 27.

Analyst Scott Henry writes the trial was halted because Tonmya did not achieve adequate separation from placebo at 12 weeks, which was the primary endpoint. The company holds out hope of being able to move forward based on successful four-week data, but “it's uncertain if the FDA will agree,” he added. 

Mr. Henry said the $1 price target reflects his estimate of residual cash. 

“We expect the shares to approach cash levels, and we don't expect a rebound pending clarity from the FDA on a future pathway utilizing a four-week endpoint, which may or may not happen,” he added. “At this point, the shares are no longer investable for most, in our opinion, due to an uncertain clinical risk profile and financial risk.”

Jennifer Poland