Jefferies analyst Amy Li downgraded the rating on Ironwood Pharma (IRWD – Research Report) to a Hold yesterday, setting a price target of $0.70.
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Amy Li’s rating is based on several factors that have emerged following recent developments with Ironwood Pharma’s drug, Apraglutide. The primary reason for the Hold rating is the need for an additional Phase 3 trial, as requested by the FDA, to confirm the drug’s efficacy and exposure levels. This requirement stemmed from the lower-than-expected drug exposure observed in the initial Phase 3 trial, which the company attributes to the method of drug administration rather than the drug itself.
Amy Li also notes that Ironwood Pharma is exploring strategic options, including partnerships and mergers, which adds an element of uncertainty to the company’s future. The need for further trials and the exploration of strategic alternatives have led to a more cautious outlook, resulting in the Hold rating. The analyst has adjusted the price target and risk-adjusted sales projections, reflecting the potential delays and uncertainties in the drug’s market launch.
IRWD’s price has also changed dramatically for the past six months – from $4.290 to $0.647, which is a -84.92% drop .