On Wednesday, Morgan Stanley (NYSE:MS) downgraded shares of CervoMed (NASDAQ:CRVO) from Equalweight to Underweight following the company's announcement of disappointing clinical trial results.
The Phase 2b RewinD-LB study of neflamapimod did not meet the primary and secondary endpoints, and the target plasma concentrations were not achieved.
The analysts at Morgan Stanley highlighted that the expected plasma concentration levels were not met in the recent RewinD-LB study. The target was a trough concentration (Ctrough) of approximately 6ng/mL, akin to what was seen in the Ascend-LB study. However, the RewinD-LB study only reached plasma concentrations of about 3ng/mL, similar to the results of the earlier Phase 2 REVERSE-SD study, despite three times a day dosing.
The Morgan Stanley report also noted that CervoMed has not yet received or analyzed data on patient compliance or adherence to the medication regimen. Furthermore, the RewinD-LB trial was conducted with a single manufacturing batch of the drug, whereas patients in the ongoing open-label extension (OLE) are using a new batch.
For CervoMed's neflamapimod to advance into Phase 3 trials, the analyst suggests that the updated data from the OLE, expected in the second quarter of 2025, must show a Ctrough of at least approximately 6ng/mL. The company's future steps hinge on these forthcoming results, which are critical for the continuation of neflamapimod's development.
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