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Investing.com - H.C. Wainwright lowered its price target on Fortress Biotech (NASDAQ:FBIO) to $17 from $26 while maintaining a Buy rating on the stock. Currently trading at $2.05, FBIO has seen significant volatility, with analyst targets ranging from $4 to $12. InvestingPro data shows the stock has demonstrated strong momentum with a 26.5% return over the past six months.
The firm cited several factors for the reduced target, including adjustments to the base year, changes to fully diluted share count, and modifications to multiple factors in its net present value (NPV) calculations for Fortress’ assets based on their development stages. With a market capitalization of $60.85 million and revenue of $59.3 million, the company maintains a moderate debt level with a debt-to-equity ratio of 1.58.
H.C. Wainwright also noted the removal of projections for Mustang Bio (NASDAQ:MBIO) pending viability of the company and its pipeline going forward, while maintaining a higher discount rate of 25% versus its usual 15% to account for the ongoing volatile financing environment.
The valuation model derives royalty value from several of Fortress’ partner companies, though the firm pointed out its model excludes anticipated cash flow from milestone payments, royalties, priority review voucher sharing, equity positions in partner companies, and the 2.5% yearly stock dividend received from several partners.
H.C. Wainwright identified potential risks to achieving the price target, including failed or inconclusive clinical trials and the possibility that Fortress might be unable to secure adequate funding to advance its drug candidates through development.
In other recent news, Mustang Bio has received Orphan Drug Designation from the U.S. Food and Drug Administration for its MB-101 therapy. This treatment targets recurrent diffuse and anaplastic astrocytoma and glioblastoma. The designation offers incentives such as tax credits for clinical trial costs and waivers for prescription drug user fees. Furthermore, it grants seven years of market exclusivity for the disease if the product gains FDA approval. Meanwhile, Fortress Biotech reported that shareholders approved all board proposals at their recent annual meeting. Seven directors were elected to serve until the 2026 annual meeting, with each receiving a majority of votes in favor. The election results were disclosed in a press release based on a filing with the SEC. These developments highlight key updates for both Mustang Bio and Fortress Biotech.
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