On Monday, Baird has adjusted its stance on Cogent (NASDAQ:COGT), downgrading the stock from Outperform to Neutral and slashing the price target to $8.00 from the previous $14.00. The decision follows a review of recent clinical data and market competition assessments.
Cogent's recent Part 1b data presentation at the American Academy of Allergy, Asthma & Immunology (AAAAI) indicated that their drug bezuclastinib is effective in treating non-advanced systemic mastocytosis (NonAdvSM).
Despite the positive acknowledgment of the drug's activity, Baird cited concerns including an inverse dose response and the lack of clear differentiation from existing approved treatments.
The firm noted that while bezuclastinib is active, it is not expected to capture more than approximately 25% of the indolent systemic mastocytosis (ISM) market. Given the current competitive landscape and the clinical and regulatory risks that remain, Baird believes that the risk-adjusted market potential for Cogent is now adequately reflected in the stock's price.
The revised price target of $8.00 is based on the assessment that the market opportunity for bezuclastinib, when adjusted for the associated risks, is fairly valued at current levels. This reevaluation comes as Cogent faces the challenge of distinguishing its product in a market with established competitors.
Baird's neutral position indicates a shift in expectations for Cogent's market performance and future growth potential in the segment of systemic mastocytosis treatment. The downgraded rating and reduced price target suggest a more cautious outlook for the stock's investment profile moving forward.
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