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Investing.com - BTIG downgraded Orchestra BioMed Inc. (NASDAQ:OBIO) from Buy to Neutral, removing its price target due to multiple concerns about the company’s recent decisions and timeline delays. The company, currently valued at $138 million, maintains impressive gross profit margins of 93% despite its challenges.
The downgrade follows Orchestra BioMed’s recent dilutive equity financing that resulted in over 30% dilution while maintaining its pace of spending, as well as strategic funding arrangements that BTIG believes will reduce future profitability. The stock has declined over 51% in the past six months, reflecting investors’ concerns.Get deeper insights into OBIO’s financial health with InvestingPro, which offers 12 additional investment tips and comprehensive financial analysis.
BTIG cited slipped timelines on key catalysts over several quarters, including the Terumo Corporation arbitration timeline shifting to late Q3 and the BACKBEAT trial timeline moving from first half of 2026 to mid-2026 after another protocol change.
The research firm expects a resolution to the Terumo arbitration by late September but remains uncertain whether this will result in continued partnership and milestone payments or if Orchestra BioMed will need to find a new commercial partner for its Virtue SAB program.
BTIG also expressed concern that recent strategic investments from Medtronic (NYSE:MDT) and Ligand Pharmaceuticals (NASDAQ:LGND) may make Orchestra BioMed’s future operational expense profile less appealing once commercial, while noting the company will likely need additional funding around 2027.
In other recent news, Orchestra BioMed Holdings, Inc. reported findings from a study published in JACC: Advances, highlighting the potential benefits of atrioventricular interval modulation (AVIM) therapy for patients with hypertension and diastolic dysfunction. The study showed significant improvements in cardiac function, with reductions in both office and ambulatory systolic blood pressure over six months. Additionally, the U.S. Food and Drug Administration has approved an update to the protocol of Orchestra BioMed’s BACKBEAT study, significantly expanding the patient eligibility criteria by more than 24-fold. This study evaluates AVIM therapy in patients with pacemakers and uncontrolled hypertension. In another development, Orchestra BioMed announced the commencement of an underwritten public offering of its common stock and pre-funded warrants, with an option for underwriters to purchase additional shares. Meanwhile, Ocean Biomedical, Inc. will be delisted from the Nasdaq following the denial of its appeal against a previous decision by the Nasdaq Listing and Hearing Review Council. The delisting will result in the suspension of trading for Ocean Biomedical’s securities.
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