Passage Bio: Regulatory Setback and Resource Constraints Drive Cautious Hold Amid Long-Term Optionality

In a report released today, Yun Zhong from Wedbush downgraded Passage Bio to a Hold, with a price target of $8.00.

Yun Zhong has given his Hold rating due to a combination of factors related mainly to the recent regulatory setback for Passage Bio’s lead FTD-GRN program. After the FDA signaled that full approval would require a costly randomized, controlled registrational trial, he removed PBFT02 from his valuation framework and now anchors his price target largely on projected year-end 2026 cash per share, assuming meaningful operating expense cuts.

At the same time, he acknowledges that PBFT02 still shows promising biomarker and imaging signals, suggesting potential clinical benefit and strategic value if regulatory or partnership paths improve. However, the mismatch between the company’s limited resources and the scale, time, and complexity of the required trial, combined with broader uncertainties in CNS gene therapy and a prior industry setback in a similar indication, leads him to a more cautious, wait-and-see stance rather than a more constructive rating.

In another report released yesterday, Chardan Capital also downgraded the stock to a Hold with a $7.00 price target.