Histogenics Corp (NASDAQ: HSGX) shares were down 73% of their market value at time of publishing following the release data of its Phase 3 clinical trial of NeoCart that did not meet the primary endpoint of a statistically significant improvement in pain and function in a dual threshold responder analysis one year after treatment as compared to microfracture.
Histogenics CEO Adam Gridley said that regardless of study results the company still plans to seek FDA approval based on the data released Wednesday.
Approximately 71 percent of the patients receiving NeoCart exhibited clinically meaningful improvements in pain and function a year after having the cell-regenerating product implanted, compared to 62 percent of people who had undergone microfracture, a common knee surgery, according to the company. But that was not enough to meet the endpoint, or trial goal, that Histogenics initially established in 2009.
At the same time, Swayampakula Ramakanth from H.C. Wainwright reiterated a Buy rating on Histogenics (NASDAQ: HSGX), with a price target of $2. Ramakanth commented:
We maintain our Buy rating of HSGX and lower our 12-month price target to $2.00 per share, down from $3.50. We derive our price target based on a risk-adjusted net present value analysis of projected NeoCart revenues until 2027 assuming a 12% discount rate and a 3% terminal value. We derive an rNPV of $97M for NeoCart and add $9M in cash and cash equivalents to arrive at a 12-month price target of $1.99 per diluted share, which we round to $2.00. (1) clinical; (2) commercial; (3) partnership; (4) financial; and (5) legal and intellectual property.
According to TipRanks.com, Ramakanth is a 4-star analyst with an average return of 11.8% and a 42.5% success rate. Ramakanth covers the Healthcare sector, focusing on stocks such as Diffusion Pharmaceuticals Inc, IntelGenx Technologies, and Leap Therapeutics Inc.
Histogenics Corporation, a clinical-stage company, focuses on the development of restorative cell therapies in the United States. The company offers NeoCart, a tissue implant, which is in Phase III clinical trial to treat tissue injury in the field of orthopedics, specifically cartilage damage in the knee. It has an exclusive channel collaboration agreement with Intrexon Corporation for the development and commercialization of allogeneic genetically modified chondrocyte cell therapeutics for the treatment or repair of damaged articular hyaline cartilage in humans. Histogenics Corporation was founded in 2000 and is headquartered in Waltham, Massachusetts.