Stifel Downgrades Tokai Pharmaceuticals (TKAI) to Hold
Stifel downgraded Tokai Pharmaceuticals (NASDAQ: TKAI) from Buy to Hold after ARMOR3 stopped.
Analyst Thomas Shrader commented, "The ARMOR3 DMC has informed Tokai that the trial is unlikely to reach its rPFS endpoint (ruling of futility). Essentially no other data was released leaving us to wonder what could have gone wrong. Of the several possible mechanisms, some leave room for hope while others may not. Either way, we believe it is unlikely that Tokai has the resources to complete a new trial based on a revamped therapeutic thesis – especially given the expectation that a re-worked trial would be significantly larger. In addition, attempts to refinance the company based on the expected stock price after today’s news would likely be highly dilutive. As a result, we are lowering our rating to HOLD pending an update on the company’s future plans."
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Shares of Tokai Pharmaceuticals closed at $5.20 yesterday.