On Tuesday, JPMorgan (NYSE:JPM) issued a downgrade for pharmaceutical company Kyowa Kirin, moving its stock rating from Overweight to Neutral. The firm also reduced the price target for Kyowa Kirin from the previous JPY3,700.00 to JPY2,600.00. This adjustment comes as a response to the latest development trends in rocatinlimab, a drug under investigation by Kyowa Kirin.
The downgrade was influenced by the less-than-optimistic results of the first Phase 3 study of rocatinlimab. JPMorgan analysts have tempered their expectations for the upcoming results of the second and third Phase 3 studies, which are expected to be released at the end of 2024 or early in 2025.
Analysts at JPMorgan anticipate that Kyowa Kirin's earnings may plateau in FY2025. They also suggest that there could be a lack of significant positive catalysts that might affect the company's share price in the near future. The results of the initial Phase 3 study have led to a belief that an improvement in share price sentiment might not be on the horizon for some time.
Despite these concerns, JPMorgan acknowledged the addition of ziftomenib to Kyowa Kirin's product lineup. However, they believe that it could take a while before the stock market shows a renewed interest in this particular product. The firm's outlook appears cautious, reflecting a wait-and-see approach regarding Kyowa Kirin's potential to deliver positive news that could sway investor sentiment.
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