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On Tuesday, JMP Securities adjusted its outlook on Prime Medicine (NASDAQ: PRME), reducing the price target from the previous $10.00 to $6.00, while retaining a Market Outperform rating for the company’s shares. Currently trading at $1.33, the stock sits well below analyst targets ranging from $5 to $18, according to InvestingPro data. The company, with a market capitalization of $170.64 million, appears undervalued based on InvestingPro’s Fair Value analysis. The revision follows Prime Medicine’s strategic decision to discontinue its program for Chronic Granulomatous Disease (CGD) to concentrate on broader in-vivo applications of its Prime Editing technology.
The analyst at JMP Securities acknowledged the rationale behind Prime Medicine’s shift in focus, noting the challenges posed by the high operational expenses, the small patient population for CGD, and the competitive landscape of ex-vivo cell therapies. By redirecting efforts towards larger in-vivo indications, Prime Medicine aims to leverage the significant potential of Prime Editing, which has already demonstrated value in base editing applications.
Despite the absence of a CGD catalyst, JMP Securities anticipates that Prime Medicine will require an additional funding of $100 million to $150 million to progress to proof of concept data for Wilson’s Disease and to sustain operations through 2027. The company maintains a healthy current ratio of 4.78, though its EBITDA stands at -$200 million for the last twelve months. The analyst expects that funding efforts may lead to share dilution but also points out that Prime Medicine has non-dilutive funding options available, such as milestone payments from existing collaborations with Bristol-Myers Squibb (NYSE:BMY) and Beam Therapeutics, as well as the potential for new partnerships or technology licensing deals.
JMP Securities expressed confidence in Prime Medicine’s ability to navigate through financial challenges, citing the company’s ownership of the prime-editing platform as a key asset. The firm’s analysts believe that with the strategic focus on in-vivo applications and the various avenues for funding, Prime Medicine is well-positioned to manage its financial needs and continue its development trajectory. InvestingPro analysis reveals impressive revenue growth of 550.76%, though the overall financial health score remains weak at 1.68. For deeper insights into Prime Medicine’s financial outlook and comprehensive analysis, investors can access the detailed Pro Research Report, available exclusively to InvestingPro subscribers.
In other recent news, Prime Medicine has announced a strategic shift to focus on liver disease programs, specifically targeting Wilson’s Disease and Alpha-1 Antitrypsin Deficiency (AATD), with regulatory filings anticipated in 2026. The company also reported leadership changes, with Allan Reine stepping in as CEO and Jeff Marrazzo becoming the Executive Chair, while Keith Gottesdiener will remain as a consultant. As part of its strategy, Prime Medicine is reducing its workforce by 25% to extend its financial runway into 2026. Analysts have responded to these developments with mixed adjustments. JPMorgan downgraded the stock to Neutral, citing concerns over the addressable market for their CGD program. Meanwhile, Chardan Capital Markets lowered its price target to $12 but maintained a Buy rating, and Jefferies reduced its target to $9 while also keeping a Buy rating. Citi retained its Buy rating with a $10 target, emphasizing the potential of Prime’s in vivo programs. The company is also seeking external partners for its CGD programs and is engaged in arbitration with Beam Therapeutics over rights to develop its AATD treatment.
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