JMP Securities reiterates Market Perform rating on Generation Bio stock

Investing.com - JMP Securities has reiterated its Market Perform rating on Generation Bio (NASDAQ:GBIO), according to a research note released Thursday. The stock, currently trading at $6.61, has seen a significant decline of over 37% year-to-date, according to InvestingPro data.

The research firm noted that Generation Bio has begun restructuring with the goal of creating shareholder value while developing a path forward for its accumulated technologies. JMP believes a potential buyer could emerge interested in the company’s siRNA CAR-T capabilities or selective multi-tissue delivery technologies. InvestingPro analysis shows the company maintains a FAIR Financial Health Score of 2.27, with 12 additional key insights available to subscribers.

JMP maintained its Market Perform rating while observing that the stock currently trades below its cash position, which the firm views as a fair discount consistent with other biotech companies facing similar uncertainties. This observation is supported by InvestingPro data showing the company holds more cash than debt and maintains a strong current ratio of 7.51, indicating solid short-term liquidity.

The research note pointed out that while liquidation could be considered given Generation Bio’s negative enterprise value, the company has developed significant technology that might interest several companies, with Moderna (NASDAQ:MRNA) already collaborating on delivery.

JMP Securities also commented that Generation Bio’s pivot to immunology and inflammation was a good decision, but noted that early human data is not as derisking as in other conditions, creating a cash overhang due to the long runway to data.

In other recent news, Generation Bio Co . announced a significant restructuring plan that includes a 90% reduction in its workforce, expected to be completed by the end of October. Despite these cuts, the company aims to retain its core research and development capabilities. Alongside this, Generation Bio is evaluating strategic alternatives for its pipeline, which includes a siRNA platform and other novel technologies, with the assistance of TD Cowen. Additionally, the company plans to implement a 1-for-10 reverse stock split, effective July 21, 2025, which will reduce the number of outstanding shares from approximately 67.3 million to 6.7 million.

Wedbush has downgraded Generation Bio from Outperform to Neutral, maintaining a price target of $7.00 in light of these developments. Jefferies has also adjusted its price target for the company, lowering it from $40.00 to $12.00 while keeping a Buy rating. The company is exploring options such as potential acquisitions or mergers. These recent developments reflect Generation Bio’s efforts to navigate its strategic direction amid ongoing changes.

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