H.C. Wainwright Downgrades NephroGenex, Inc. (NRX) to Neutral

H.C. Wainwright downgraded NephroGenex, Inc. (NASDAQ: NRX) from Buy to Neutral. Analyst Raghuram Selvaraju noted its Phase 3 Pyridorin trial is on hold.

"On February 24, 2016, NephroGenex’s Board of Directors decided to pause the oral Pyridorin™ pivotal program in diabetic nephropathy, effect a restructuring of the company’s operations and implement a strategic transaction. This decision was made in light of the remaining trial costs, the company’s cash balance and condition of the capital markets that could lead to a significant dilution for existing shareholders. We believe that this decision was not based on the observed efficacy or safety of Pyridorin™ itself. NephroGenex retained MTS Health Partners, L.P. to act as its financial adviser," said Selvaraju.

"The company paid off the outstanding term loan, accrued interest expense and an end-of-term fee, totaling $6.3M as of February 23, 2016. NephroGenex also implemented a workforce reduction plan, which eliminated five positions or roughly 50% of its workforce, impacting mainly the R&D organization. Management has indicated a need for a total of roughly $25 - 30M in capital to complete the Pyridorin™ pivotal program. Given the current market environment, the fact that the firm did not have confidence in its ability to raise the capital necessary to finish the Pyridorin™ Phase 3 program itself without an unacceptable degree of dilution to current shareholders, and what we believe is a low likelihood of the firm attracting strategic partners to invest in completion of the Pyridorin™ program, we believe that stepping to the sidelines constitutes the most appropriate action at this juncture," added the analsyt.

For an analyst ratings summary and ratings history on NephroGenex, Inc. click here. For more ratings news on NephroGenex, Inc. click here.

Shares of NephroGenex, Inc. closed at $0.50 yesterday.

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