Aerovate Therapeutics Inc (NASDAQ:AVTE) Downgraded By Analysts

By Swapna Meka June 19, 2024, 5:00 pm • Posted in Companies, Stocks

Aerovate Therapeutics Inc (NASDAQ:AVTE), a clinical-stage biopharmaceutical company focused on developing drugs that improve the lives of patients with rare cardiopulmonary disease, stock plunges 14.55% (As on June 19, 7:59:28 PM UTC-4, Source: Google Finance) after Wells Fargo downgraded the company to Equal Weight from Overweight with a price target of $2, down from $35, following the company’s announcement that AV-101 did not meet its primary endpoint for any of the studied doses or show meaningful improvements in the secondary endpoint of change in six-minute walk distance.

Moreover, the company experienced a significant shift in its stock rating as Jefferies downgraded the biopharmaceutical company from Buy to Hold. The firm also drastically reduced the price target for Aerovate’s shares to $2.00 from the previous $65.00 following the announcement of the Phase IIB trial results for Pulmonary Arterial Hypertension (PAH). The Phase IIB study did not meet its primary endpoint, as none of the three dosages tested showed a clinically meaningful improvement in Pulmonary Vascular Resistance. This outcome was a setback for the company, given the high stakes associated with the trial’s success. The failure of the trial could be attributed to various factors, but it is suspected to be related to a translational pharmacokinetics (PK) issue. This was a significant point of uncertainty that many had considered prior to the results. In response to these developments, Jefferies has removed AV-101, the drug involved in the Phase IIB trial, from their financial model for Aerovate. The objective of the Phase 2b portion of IMPAHCT was to assess the efficacy, safety and tolerability of three different doses of AV-101 compared to placebo. The primary endpoint for the Phase 2b portion of IMPAHCT is change in PVR compared with placebo. The Company has also reviewed data from several additional secondary endpoints of the Phase 2b portion of IMPAHCT, which also failed to show meaningful improvements. Based upon these results, Aerovate, in agreement with the independent study advisory committee, is halting enrollment and shutting down the Phase 3 portion of IMPAHCT as well as the long-term extension study. As of June 15, 2024, Aerovate has approximately $100 million of cash, cash equivalents and short-term investments.