On Wednesday, Chardan Capital Markets adjusted its rating for CervoMed (NASDAQ: CRVO), downgrading the stock from Buy to Neutral. The decision came after CervoMed reported disappointing results from its recent Phase 2b RewinD-LB study for neflamapimod, a drug intended to treat dementia with Lewy bodies (DLB).
The news triggered a dramatic 77.7% stock price decline over the past week, with shares now trading at $2.16, near their 52-week low. According to the firm, neflamapimod failed to meet the primary or secondary endpoints of the trial.
The RewinD-LB was a study focused on patients with early-stage DLB without Alzheimer's disease co-pathology. The trial included 159 patients who were randomized to receive either neflamapimod capsules or a matching placebo over a 16-week period.
However, the drug did not show the expected change in the Clinical Dementia Rating Sum of Boxes (CDR-SB), which was the study's primary goal.
Moreover, neflamapimod did not achieve the anticipated results in secondary measures such as the Timed Up and Go (TUG) test, Neuropsychological Test Battery (NTB), Clinical Global Impression of Change (CGIC), and various biomarkers.
The negative outcome of the RewinD-LB study has led to uncertainty regarding the future of neflamapimod. Given the lack of a clear path forward for the drug, Chardan Capital Markets has also withdrawn its price target for CervoMed.
The firm's decision reflects the setback for CervoMed's sole clinical stage asset, which was under investigation as a potential treatment for DLB, a condition characterized by cognitive decline and movement disorders.
InvestingPro data reveals the company maintains a strong liquidity position with a current ratio of 15.04, though it faces challenges with negative EBITDA of $13.47M. For deeper insights into CervoMed's financial health and 15+ additional ProTips, consider an InvestingPro subscription.
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