Fed’s Powell opens door to potential rate cuts at Jackson Hole
On Tuesday, Morgan Stanley (NYSE:MS) revised its price target for Silence Therapeutics (NASDAQ:SLN) stock, decreasing it to $45.00 from the previous target of $49.00. Despite the price target adjustment, the firm maintained an Overweight rating on the stock. The change comes as a result of the latest updates to the company’s financial model for the fourth quarter and full year of 2024. According to InvestingPro data, SLN currently trades at $4.48, significantly below its 52-week high of $27.72, with a market capitalization of $211 million. The stock has experienced substantial pressure, declining over 83% in the past year.
The adjustments to the financial model include the company’s transition from reporting as a foreign private issuer in British pounds to a U.S. domestic issuer in U.S. dollars, aligning with U.S. Generally Accepted Accounting Principles (GAAP). This transition has necessitated updates to Silence Therapeutics’ financial statements. InvestingPro analysis shows the company maintains strong liquidity with a current ratio of 11.14 and holds more cash than debt on its balance sheet, though it’s currently burning through cash rapidly.
Further influencing the price target change is a modification to the probability of success (POS) for Silence Therapeutics’ product, zerlasrian. Morgan Stanley analysts have reduced the POS to 62% from the prior estimate of 75%. The adjustment reflects the company’s increased focus on finding partnership opportunities for zerlasrian, which has subsequently affected the product’s valuation in the financial model.
The analyst’s comments provide insight into the reasoning behind the new price target, stating, "We update the SLN model for 4Q/FY24 actuals, including updating financial statements to reflect the company’s transition from a foreign private issuer (British pounds) to a US domestic issuer (USD), in accordance with US GAAP. Additionally, we modestly lower the POS for zerlasrian to 62% (from 75% previously) given focus on partnering and as a result, our PT decreases to $45 (from $49, previously)." For deeper insights into SLN’s valuation and 12+ additional ProTips, including detailed financial health metrics and Fair Value analysis, investors can access the comprehensive Pro Research Report available on InvestingPro.
The updated price target and maintained Overweight rating indicate that while Morgan Stanley has adjusted expectations for Silence Therapeutics, the firm still holds a positive outlook on the company’s stock performance.
In other recent news, Silence Therapeutics reported a significant increase in revenue for 2024, reaching $43.3 million, up from $31.6 million in the previous year. This growth is attributed to strategic collaborations with AstraZeneca (NASDAQ:AZN) and Hanseo Pharma, which have bolstered the company’s financial performance. The company also announced a net operating loss reduction, reporting $63.3 million in 2024 compared to $64.4 million in 2023, and a net loss of $45.3 million, down from $54.2 million in 2023. Silence Therapeutics’ cash reserves are projected to extend its runway into 2027, with $147.3 million in cash and equivalents as of December 2024.
The company has decided to delay the phase 3 trial of its drug candidate, zerlasiran, until a partnership is secured, which is expected to extend its financial flexibility. Meanwhile, the company’s focus will shift to its second asset, divesiran, targeting TMPRSS6 for polycythemia vera, with additional data from the phase 1 study anticipated in 2025. Silence Therapeutics plans to initiate a phase 1 trial for SLN548, an siRNA therapy targeting complement factor B, in the second half of 2025. Jefferies analyst Kelly Shi recently adjusted the price target for Silence Therapeutics to $30.00 from $31.00, maintaining a Buy rating on the stock. These developments underscore the company’s strategic focus on advancing its pipeline of RNAi therapies for rare diseases.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.