Amylyx stock downgraded with price target cut to $4 from $32

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On Monday, Amylyx Pharmaceuticals Inc. (NASDAQ:AMLX) experienced a significant shift in its stock outlook as Mizuho Securities adjusted its rating and price target for the company.

The biopharmaceutical firm, known for its work in developing treatments for neurodegenerative diseases, was downgraded from a “Buy” to a “Neutral” stance. The price target set by Mizuho was also drastically reduced to $4.00 from the previous figure of $32.00.

The downgrade decision came in response to last week’s disappointing Phase 3 PHOENIX trial results for Amylyx’s drug Relyvrio/AMX0035, which is intended to treat amyotrophic lateral sclerosis (ALS). The less than favorable outcome prompted the firm to reassess the drug’s future market viability. According to Mizuho, there is now a base case assumption that Amylyx might opt to voluntarily withdraw Relyvrio from the market.

Mizuho’s revised valuation of Amylyx is based on a discounted cash per share approach, reflecting a more conservative outlook on the company’s financial prospects. The firm also indicated that it plans to conduct further discussions with ALS specialists and payors to understand their perspective on Relyvrio post-PHOENIX trial.

Investors and stakeholders are advised to look forward to May 2024, when Amylyx is expected to provide an update on Relyvrio. Until that time, the market’s valuation of the company will likely be influenced by the new, significantly lower price target and the uncertainty surrounding the drug’s status.

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