Raymond James Downgrades Third Harmonic Bio (THRD) to Market Perform

Raymond James analyst Laura Prendergast downgraded Third Harmonic Bio (NASDAQ: THRD) from Outperform to Market Perform.

The analyst comments "Third Harmonic Bio (THRD) presented Phase 1 healthy volunteer data for THB335 (slides). Although data supports advancement to Phase 2, it does not support a best in class profile as robust tryptase reduction is associated with hematological AEs (hemoglobin decrease). This toxicity will likely limit THB335 to doses that induce moderate tryptase reductions in Phase 2. Predicated on the uncertain path forward for THB335 (only asset in pipeline), we are downgrading to a Market Perform. We note THRD is trading significantly below cash (~$6.30/share based on projected cash position in mid-2025). THRD has a strong balance sheet to support operations through plans outlined on call. See risks and disclosures section for more info. THRD will continue THB335 development activities through 1H25 to prep for initiation of a Phase 2 study in CSU by mid-2025. Commentary on today’s conference call suggests moving forward with this Phase 2 study could heavily depend on outcome of THRD’s active exploration of strategic transaction and/or business combination options that would maximize shareholder value. THRD plans to leverage its strong balance sheet in this process — as of YE24, THRD has ~$285M in cash and cash equivalents and expects to have ~$262-267M in cash by the end of 2Q25. Key near-term activities include completion of ongoing sub-chronic toxicology studies and submission of regulatory filings to position THB335 for Phase 2 initiation. The full Ph1 clinical results will be presented as a poster presentation at AAAAI on 3/2/24."

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Shares of Third Harmonic Bio closed at $4.65 yesterday.

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