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On Monday, Mizuho (NYSE:MFG) Securities adjusted its price target for Neumora Therapeutics (NASDAQ:NMRA) shares, significantly reducing it to $4 from the previous $20, while maintaining an Outperform rating on the stock. The revision comes ahead of the company’s fourth-quarter update scheduled for March 3rd. The stock, currently valued at a market cap of $281 million, has experienced significant pressure, falling over 90% in the past year. According to InvestingPro data, the stock is currently trading below its Fair Value. The change in price target is largely a response to the recent disappointing Phase 3 KOASTAL-1/K-1 study results for Neumora’s lead asset, navacaprant, which is being developed to treat major depressive disorder (MDD).
Analysts at Mizuho have acknowledged that the reduction in the price target was a necessary update following last month’s announcement. The negative outcome of the clinical study has not only impacted the projected success of navacaprant in treating MDD but also cast doubt on its potential in treating bipolar depression (BPD). Despite this setback, Phase 2 data for the BPD indication are still expected in the second half of 2025.
In light of these developments, Mizuho’s analysts have cited several reasons for maintaining an optimistic outlook on Neumora Therapeutics. Among these reasons is the recent appointment of a new CEO, a diversified pipeline that extends beyond navacaprant, and a cash runway that should sustain the company’s operations until mid-2026. Additionally, the company is anticipated to have multiple data catalysts throughout 2025.
The analysts also highlighted that despite the current challenges, their new price target suggests an upside potential of over 100%. This perspective indicates that, while some investors might currently be cautious, considering the company’s stock as a "do not touch/let’s revisit later" case, there are still factors that could drive future growth and recovery for Neumora Therapeutics. InvestingPro analysis reveals the company maintains a strong liquidity position with a current ratio of 10.98, holding more cash than debt on its balance sheet. For deeper insights into Neumora’s financial health and future prospects, including 12 additional ProTips and comprehensive valuation metrics, check out the full Pro Research Report available on InvestingPro.
In other recent news, Neumora Therapeutics has undergone significant leadership changes, appointing co-founder Paul L. Berns as CEO and chairman of the Board, along with other key executive appointments. The company is set to discuss its financial results for the fourth quarter and full year 2024 in March 2025. Despite recent setbacks in its KOSTAL-1 trial for navacaprant, a treatment for major depressive disorder, analysts have varied opinions on the company’s future. BofA Securities has reduced its price target for Neumora from $22.00 to $7.00 but maintained a Buy rating, citing potential positive outcomes from ongoing trials. H.C. Wainwright reaffirmed its Buy rating with a $30.00 price target, noting positive results in female patients during the KOASTAL-1 study. Mizuho Securities also reiterated an Outperform rating with a $20.00 target, despite the trial’s failure, and highlighted the company’s cash runway extending to mid-2026. Conversely, RBC Capital Markets downgraded Neumora to Sector Perform, reducing the price target to $4.00, reflecting caution after the trial results. These developments indicate a complex outlook for Neumora as it navigates its clinical trials and leadership transitions.
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