Guggenheim maintains buy on Neumora shares, target at $7

Published 03/03/2025, 20:02
Guggenheim maintains buy on Neumora shares, target at $7

On Monday, Guggenheim reiterated its Buy rating on Neumora Therapeutics (NASDAQ:NMRA) with a price target of $7.00, representing significant upside from the current price of $1.45. The stock has fallen over 91% in the past year, now trading near its 52-week low of $1.51. According to InvestingPro data, analyst targets range from $4 to $30, suggesting potential recovery opportunities. The firm’s analysis followed Neumora’s announcement of its fourth-quarter 2024 financial results and updates on its pipeline. Neumora reported the temporary pause of its KOASTAL-2 and -3 studies for the drug navacaprant, with plans to resume in March 2025. This decision comes after the KOASTAL-1 study did not meet its primary endpoint, prompting the company to implement optimizations such as enhanced medical monitoring and a focus on high-quality clinical sites.

Neumora has also decided to discontinue its Phase II trial in bipolar depression to allocate more resources to the KOASTAL program. However, the company expressed its intention to re-evaluate the opportunity to pursue this indication in the future. InvestingPro analysis shows the company maintains a strong financial position with a current ratio of 10.98, indicating ample liquidity to fund its development programs. The company’s overall Financial Health score is rated as FAIR by InvestingPro, with particularly strong scores in cash flow management. Guggenheim highlighted the expected release of topline data from the KOASTAL-3 study in the first quarter of 2026 and from KOASTAL-2 in the second quarter of 2026.

Additionally, Neumora anticipates topline data from a Phase Ib study with NMRA-511, aimed at treating agitation in Alzheimer’s disease, by the end of 2025. The company also plans to advance its next M4 PAM program into clinical trials by mid-2025, noting the potential for once-daily dosing and an improved safety profile.

The departure of Henry Gosebruch, Neumora’s former CEO, and Robert Lenz, M.D., Ph.D., executive vice president and head of R&D, was also noted. Despite these changes in leadership, Guggenheim’s outlook remains positive, emphasizing the potential impact of Johnson & Johnson’s aticaprant study results on investor confidence in Neumora’s KOASTAL program. Johnson & Johnson has completed its VENTURA-1 study and is expected to report results in the first half of 2025, with plans for a New Drug Application submission for aticaprant within the same year.

In other recent news, Neumora Therapeutics reported its fourth-quarter financial results, surpassing earnings expectations with an adjusted loss per share of -$0.37, compared to analyst estimates of -$0.62. Despite this earnings beat, the company announced significant changes to its clinical trials for navacaprant, a drug intended for major depressive disorder, which drew more attention from investors. Neumora plans to pause and optimize its KOASTAL-2 and KOASTAL-3 trials, projecting topline data in 2026. These adjustments come after the KOASTAL-1 study’s failure, prompting the company to reduce clinical sites, enhance monitoring, and improve participant screening. Additionally, Neumora discontinued a Phase 2 trial for navacaprant in bipolar depression to concentrate resources on the KOASTAL program. The company reported $307.6 million in cash and securities as of December 31, 2024, expected to support operations into mid-2026. Research and development expenses increased to $200.9 million for 2024, attributed to the navacaprant trials’ progression. Stifel analyst Paul Matteis maintained a Buy rating on Neumora but lowered the price target from $26.00 to $6.00, citing the increased risk after the KOASTAL-1 study’s outcome.

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