HCW downgrades Proteon to neutral

H.C. Wainwright downgraded Proteon Therapeutics (NASDAQ:PRTO) to “neutral” from “buy” and slashed its price target to $3 from $18, citing a lack of major catalysts that will likely render the shares range-bound. The stock closed at $1.75 on March 16.

“We believe that with Patency-2 results expected in the fourth quarter of 2018 being the next major clinical milestone, there is a lack of significant catalyst events before then that could help drive stock price appreciation,” writes analyst Swayampakula Ramakanth.

The ongoing Patency-2 study is investigating the use of Proteon’s lead product candidate, vonapanitase, during radiocephalic arteriovenous fistula surgery in order to prolong vascular patency.

While the company is also conducting two Phase 1 studies to evaluate the use of vonapanitase to treat peripheral artery disease, Mr. Ramakanth said these are not expected to complete before the end of 2017 and are only dose-escalation studies that are unlikely to demonstrate meaningful clinical benefit.

In addition, he said the company has mentioned partnerships in territories outside the U.S. for future commercial expansion. “We believe these are potential sources of non-dilutive funding, but management has not yet provided specific timelines,” he added.

As a result, he expects the company’s stock to remain range-bound for at least the next six-to-eight months in the absence of major announcements such as new products in development or new business development agreements.