Rezolute Downgraded to Hold Amid Disappointing Phase 3 Trial Results for Ersodetug

Wedbush analyst Yun Zhong downgraded the rating on Rezolute to a Hold today, setting a price target of $1.00.

Yun Zhong’s rating is based on the recent developments surrounding Rezolute’s clinical trials. The downgrade from an Outperform to a Hold rating follows disappointing results from the Phase 3 study of ersodetug in congenital hyperinsulinism, which did not replicate the efficacy seen in earlier trials. This has led to the removal of both the congenital and tumor hyperinsulinism programs from the company’s valuation, despite management’s ongoing confidence in the tumor HI study.
Furthermore, the placebo-controlled Phase 3 trial failed to achieve its primary endpoint, showing only a marginal difference in efficacy between the treatment and placebo groups. This outcome raises concerns about the drug’s effectiveness and casts doubt on the regulatory pathway forward. Although Rezolute plans to conduct further analysis and engage with the FDA, the uncertainties surrounding the drug’s efficacy and regulatory approval contribute to the Hold rating.

Zhong covers the Healthcare sector, focusing on stocks such as Rezolute, Protagonist Therapeutics, and MannKind. According to TipRanks, Zhong has an average return of -2.6% and a 45.45% success rate on recommended stocks.