Stifel Downgrades Neoleukin Therapeutics (NLTX) to Hold

Stifel analyst Benjamin Burnett downgraded Neoleukin Therapeutics (NASDAQ: NLTX) from Buy to Hold with a price target of $0.90 (from $14.00).

The analyst comments "We are downgrading shares to Hold following management’s decision to discontinue development of lead asset NL-201 (next-gen IL-2 analogue). Management said that the decision was informed by their assessment of the therapeutic window, and now looks to use their experience with NL-201 to improve the de novo protein technology, including targeted and conditionally active approaches. NLTX will present preclinical data at ASH 2022 on a novel Treg agonist, though as of now details on its development strategy haven’t been disclosed (such as indication), and so we don’t yet include this in our model. Mgmt. will be reorganizing the business, which includes an estimated ~40% head-count reduction; associated cost savings extend NLTX’s cash runway to 2H25. Our valuation is now based on a cash/share estimate in 2Q23, whereby then we look for mgmt. to provide some clarity on preclinical inflection points for early-stage assets. Our new target price is $0.9/share."

For an analyst ratings summary and ratings history on Neoleukin Therapeutics click here. For more ratings news on Neoleukin Therapeutics click here.

Shares of Neoleukin Therapeutics closed at $0.53 yesterday.

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