HCW cuts Histogenics PT to $2 from $3.50

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H.C. Wainwright lowered its price target for Histogenics (NASDAQ:HSGX) to $2 from $3.50, but maintained its “buy” rating, after the company missed its primary endpoint in a Phase 3 study of NeoCart for knee cartilage repair.

Shares of Histogenics were quoted at 86 cents, down $1.91, or 69%, in afternoon trading on Sept. 5.

Analyst Swayampakula Ramakanth writes that despite the missed primary endpoint, “not all hope is lost.”

According to the results, 74% of the NeoCart patients achieved improvements in both physical functioning and pain score at one-year post surgery, compared with an improvement of 62% in patients receiving standard-of-care microfracture surgery (MFX), which missed statistical significance.

“However, despite the disappointing top-line result, we note that NeoCart showed significant benefits over MFX in a number of secondary endpoints,” he added. “Therefore, when considering the totality of the data presented, we believe that NeoCart still has a reasonable chance of securing FDA approval.” 

Mr. Ramakanth said the company intends to hold a Type A meeting with the FDA within the next 30 days to discuss the regulatory path forward and, pending a positive response from the agency, intends to submit the NeoCart BLA application in the fourth quarter of 2018. 

“If the agency deems the data acceptable for review and approval, we believe that the company would still be on track to launch NeoCart in the U.S. in early 2020,” he added.

Stephen Kilmer