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On Wednesday, Turnstone Biologics shares faced a setback after Piper Sandler downgraded the company’s stock rating from Overweight to Neutral. This decision was accompanied by a significant reduction in the price target, which now stands at $0.40, down from the previous $3.75. According to InvestingPro data, the stock has already declined over 80% in the past six months, with shares currently trading at $0.46.
The downgrade by Piper Sandler followed Turnstone Biologics’ announcement that it would halt all clinical studies of its TIDAL-01 treatment, a decision based on the latest review of available data and the realization of the need for further manufacturing process improvements. The company is also considering strategic alternatives in light of the discontinuation of its development programs. InvestingPro analysis reveals the company has been quickly burning through cash, with an EBITDA of -$74.91 million in the last twelve months.
Piper Sandler analysts have removed all projected value for TIDAL-01 following the company’s update. The initial clinical data for TIDAL-01, which had shown early signs of activity in colorectal cancer (CRC), was not sufficient to continue the investment in development given the capital required.
The revised price target reflects the firm’s assessment of Turnstone Biologics’ estimated cash balance for the first quarter of 2025, which is anticipated to be around $11 million. The new price target of $0.40 is a stark decrease from the former target of $3.75, indicating a reassessment of the company’s valuation in light of the recent developments.
In other recent news, Turnstone Biologics has announced the discontinuation of its TIDAL-01 clinical program, aimed at treating solid tumors, while exploring strategic options that may include mergers, acquisitions, or asset sales. The decision was influenced by the capital-intensive nature of the program and current financial market conditions. In response to these developments, Turnstone is implementing workforce reductions and cost-containment measures. The company has also engaged a financial advisor to assist with the strategic review process.
BofA Securities recently downgraded Turnstone Biologics stock from Neutral to Underperform, following a review of third-quarter updates. Factors contributing to the downgrade included limited availability of bed space at infusion centers, slower patient enrollment rates, and concerns about the company’s financial position.
Turnstone Biologics has also advanced its research on tumor-infiltrating lymphocyte (TIL) selection methods, as presented at the Society for Immunotherapy of Cancer (SITC) 39th Annual Meeting. The company’s research supports the development of its clinical candidate TIDAL-01, which employs a novel process to isolate and selectively expand the most potent neoantigen-reactive TILs from a patient’s tumor. These developments are part of Turnstone’s broader efforts to adjust its business strategy amidst challenging conditions.
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