On Thursday, Oppenheimer adjusted its price target for Spruce Biosciences, Inc. (NASDAQ:SPRB) shares, reducing it to $3.00 from the previous $4.00 while maintaining an Outperform rating on the company's stock.
Spruce Biosciences recently provided financial and business updates for the first quarter of 2024. The company's management remains optimistic about the ongoing CAHmelia-204 study, which is expected to have its results read out in the third quarter of 2024.
This study is particularly significant following the failure of the CAHmelia-203 study in March. The CAHmelia-204 study is distinct due to its different patient population and has seen higher compliance rates, which could potentially influence the study's outcome.
Additionally, Spruce Biosciences has expanded its CAHptain-205 dose-ranging study to include both adult and pediatric patients with congenital adrenal hyperplasia (CAH). The results from this study will be used to refine the dosing algorithm for the company's investigational drug, tildacerfont.
In another strategic move, Spruce Biosciences has announced a collaboration with HMNC Brain Health GmbH to explore the use of tildacerfont in treating major depressive disorder (MDD). This partnership aims to leverage precision psychiatry to develop effective treatments for MDD.
Furthermore, Spruce Biosciences has been involved in research on polycystic ovary syndrome (PCOS), with promising early data that could attract partnership opportunities. The full data from this research was presented at the ENDO 2024 conference.
The revised price target from Oppenheimer reflects an updated valuation model for Spruce Biosciences. Despite the reduction in the price target, the firm's analyst maintains a positive outlook on the stock's performance.
In other recent news, Spruce Biosciences has been the subject of several analysts' reviews due to recent developments. Following the disappointing results of the CAHmelia-203 trial, Ladenburg Thalmann downgraded the company from Buy to Neutral.
RBC (TSX:RY) Capital also adjusted its stance, downgrading the stock from Outperform to Sector Perform and reducing the price target to $2. JMP Securities and Oppenheimer also revised their price targets, setting them at $3 and $4, respectively.
The CAHmelia-203 trial, which aimed to treat adult patients with Congenital Adrenal Hyperplasia (CAH) and severe hyperandrogenemia, did not meet its primary endpoint. However, Spruce Biosciences remains optimistic about the upcoming CAHmelia-204 and CAHptain-205 trials. The company is also planning new pivotal trials based on the data from these studies.
In terms of financials, Spruce Biosciences reported a net loss of $12 million or ($0.28) per share for Q1 2024. The company has taken steps to reduce its workforce by 21% to extend its cash runway, with $81 million in cash on hand to fund its operations and clinical development.
Despite the setbacks, Spruce Biosciences remains committed to advancing tildacerfont, its lead candidate, which targets conditions such as Polycystic Ovary Syndrome (PCOS) and Congenital Adrenal Hyperplasia (CAH). The company's future will depend on its ability to differentiate tildacerfont and demonstrate its value within the competitive market.
InvestingPro Insights
As Spruce Biosciences (NASDAQ:SPRB) navigates through its clinical studies and strategic collaborations, investors and analysts are closely monitoring its financial health and market performance. According to InvestingPro data, Spruce Biosciences holds a market capitalization of approximately $27.38 million USD and is trading at a price to book ratio of 0.41 as of the last twelve months leading into Q1 2024. Notably, the company has experienced an impressive 415.63% revenue growth over the same period, reflecting significant developments in its operations.
However, the company's financials also reveal some challenges. Spruce Biosciences has a negative gross profit margin of -374.35%, indicating that it is currently not generating a profit from its core operations. Moreover, the company's stock has seen substantial volatility, with a 1-month price total return of -17.37% and a steep 3-month price total return of -87.18%, highlighting the risks associated with its stock.
InvestingPro Tips suggest that while Spruce Biosciences holds more cash than debt on its balance sheet, it is quickly burning through cash, and analysts do not anticipate the company will be profitable this year. Additionally, the company's stock is trading near its 52-week low, which may present a buying opportunity for some investors or a sign of caution for others. For those looking for more in-depth analysis, InvestingPro offers additional tips on Spruce Biosciences, and users can take advantage of a special offer using coupon code PRONEWS24 to get an extra 10% off a yearly or biyearly Pro and Pro+ subscription.
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