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On Thursday, Raymond (NSE:RYMD) James adjusted its stance on InflaRx NV (NASDAQ:IFRX), downgrading the biopharmaceutical company’s stock rating from Strong Buy to Outperform. The firm also significantly reduced the price target for InflaRx shares from $13.00 to $2.00. The downgrade comes as the stock has experienced significant pressure, falling nearly 60% in the past week and trading near its 52-week low of $0.71. According to InvestingPro data, the stock’s current price suggests it may be undervalued based on Fair Value analysis. The revision followed a recommendation from the Independent (LON:IOG) Data Monitoring Committee (IDMC) to halt the Phase 3 trial of vilobelimab for the treatment of Pyoderma Gangrenosum (PG) at the interim futility analysis due to a lack of observed treatment effect.
In response to the trial’s outcome, InflaRx has decided to discontinue the development of vilobelimab for PG and redirect its resources to advancing INF904 in Hidradenitis Suppurativa (HS) and Chronic Spontaneous Urticaria (CSU). The company’s focus now shifts to the upcoming Phase 2a readout for INF904 in HS and CSU, a pivotal moment for InflaRx’s development program.
Raymond James’ revised investment thesis is primarily centered on the potential of the INF904 programs. Despite expressing a positive outlook on INF904’s mechanism, the firm acknowledges the increased uncertainty due to the programs’ early stages, which necessitated the reduction in the price target.
The financial outlook for InflaRx remains stable, with the company anticipating a cash runway extending into 2027. This forecasted financial sustainability is expected to cover the company through the Phase 2a INF904 readout. InvestingPro analysis reveals that while the company holds more cash than debt and maintains a strong current ratio of 5.28, it is quickly burning through cash. The potential for improved financials exists, contingent upon the cost-saving measures InflaRx may implement, especially as they conclude the PG clinical study. For deeper insights into InflaRx’s financial health and 15+ additional ProTips, consider exploring InvestingPro’s comprehensive analysis tools.
In other recent news, Inflarx NV has reported its financial performance for the first quarter of 2025, showing a research and development expense of €8.0 million, which was below the consensus estimate of €8.7 million. The company’s earnings per share were (€0.13), outperforming the anticipated (€0.21) according to analysts. Guggenheim Securities has maintained its Buy rating on Inflarx and raised the price target to $10, citing progress in clinical programs and a strong financial position. Meanwhile, Raymond James reaffirmed its Strong Buy rating with a $13 target, expressing optimism about Inflarx’s drug candidates, including vilobelimab and INF904. Cantor Fitzgerald initiated coverage with an Overweight rating and a $10 target, highlighting the potential impact of the upcoming Phase 3 interim analysis for vilobelimab. Despite the halt of the Phase III study for vilobelimab in treating ulcerative pyoderma gangrenosum, Guggenheim remains positive due to Inflarx’s substantial cash reserves and potential in immuno-dermatology. Inflarx’s cash reserves, reported at approximately $84 million, are expected to fund operations into 2027. The European Commission has also granted marketing authorization for vilobelimab for SARS-CoV2-induced septic acute respiratory distress syndrome. These developments reflect ongoing interest and confidence from investment firms in Inflarx’s future prospects.
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