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On Monday, Ascendiant Capital analysts adjusted their outlook on 60 Degrees Pharmaceuticals Inc (NASDAQ:SXTP) by reducing the price target to $7.00 from the previous $8.50, while maintaining a Buy rating on the stock. The revised price target is attributed to a reassessment of the company’s fair value, now estimated at $10.9 million, up from $8.2 million. According to InvestingPro data, the stock has shown strong momentum recently, posting a 28% return over the past week, despite being down 85% over the past year.
The updated price target reflects a 170% potential upside from the current stock price, which is slightly above the net cash per share. Analysts highlighted a potentially larger opportunity in Babesiosis as a factor in the valuation adjustment. InvestingPro analysis reveals the company maintains a healthy current ratio of 3.13, with more cash than debt on its balance sheet, though it’s currently burning through cash rapidly.
Despite the positive growth prospects, the analysts noted significant risks associated with the stock. These include low visibility on regulatory approval for new indications and the potential for dilution from future financing activities.
The reevaluation of 60 Degrees Pharmaceuticals’ price target comes amid ongoing assessments of the company’s market opportunities and challenges. The analysts emphasized the balance between high risks and the potential for substantial growth in their valuation.
In other recent news, 60 Degrees Pharmaceuticals has announced a partnership with Yale School of Medicine and Yale School of Public Health to co-develop and commercialize tafenoquine for the treatment and prevention of babesiosis. This collaboration follows promising initial research into tafenoquine’s effectiveness against the tick-borne disease, which poses significant risks to elderly and immunocompromised individuals. The company is currently sponsoring a clinical trial to evaluate the safety and efficacy of tafenoquine in treating severe cases of babesiosis. This trial, which is randomized, double-blind, and placebo-controlled, is being conducted at several U.S. locations, including Tufts Medical (TASE:BLWV) Center and Yale University. Tafenoquine, marketed under the name ARAKODA®, is already approved for malaria prophylaxis in the United States and Australia. However, it carries risks for individuals with G6PD deficiency and those with a history of psychotic disorders. The drug requires careful monitoring due to its long half-life, which can lead to delayed adverse reactions. 60 Degrees Pharmaceuticals has a history of collaboration with global research institutions and has received support from the U.S. Department of Defense and private investors.
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