Adam Jackson
After an unfavorable outcome in a clinical trial, Seelos Therapeutics Inc. (Nasdaq: SEEL) saw its stock price plummet on Wednesday, falling 70% after news. Thursday continued the downward trend during pre-market trading after Cantor Fitzgerald downgraded the stock.
SLS-002, the company’s investigational psychedelic therapy, was aimed at alleviating suicidal symptoms in adults diagnosed with major depressive disorder. However, the 147-patient Phase 2 trial failed to achieve meaningful signals for its primary endpoint.
Financial constraints, which led to a failure in meeting the enrollment target, were cited by Seelos as the primary reason for the trial’s setback.
Charles Duncan, a Cantor analyst, subsequently downgraded Seelos from “Overweight” to “Neutral.” Duncan pointed out that the company’s financial limitations could obstruct its ability to effectively conduct and complete such trials in the future.
Furthermore, given the uncertainties concerning the regulatory response to the data, which might be addressed in a forthcoming meeting with the Food and Drug Administration, Duncan chose a conservative approach. He’s opted to remain neutral and has suspended his previous $2 per share target price.
