Stifel downgrades Clearside Biomedical stock to Hold on cash concerns

Investing.com - Stifel downgraded Clearside Biomedical (NASDAQ:CLSD) from Buy to Hold and slashed its price target to $2.00 from $8.00 as the company faces severe financial constraints. The stock, which has plummeted 32% in the past week and trades at a market cap of $47 million, shows signs of being undervalued according to InvestingPro Fair Value analysis.

The biotech company has reached the end of its cash runway without securing new capital and is now exploring strategic alternatives, according to Stifel. With a current ratio of 3.19 but rapidly depleting cash reserves, as highlighted by InvestingPro’s financial health metrics, the situation is critical. Despite having a validated SCS Microinjector platform with an approved product, multiple development partnerships, and a Phase 3-ready asset in CLS-AX/TKI for wet age-related macular degeneration, the company is halting all development programs.

Clearside is transitioning employees to consulting agreements while continuing to support the platform for licensees of the Microinjector. The company aims to preserve cash and maximize the remaining value in its platform technology.

Stifel noted that Clearside has been seeking capital for some time, including through potential partnerships, to further develop its CLS-AX product. The outcome of these new strategic efforts remains uncertain.

The research firm indicated that Clearside will no longer operate in its current form as it focuses on preserving its remaining assets and value.

In other recent news, Clearside Biomedical has announced its financial results for the first quarter of 2025, reporting revenue of $2.3 million. This includes $1.5 million from milestones achieved with Arctic Vision and $0.8 million from other sources. The company also reported a net loss of $8.2 million, or $0.11 per share, which was less than the estimated loss of $9.1 million. Clearside Biomedical is currently exploring strategic alternatives due to difficulties in securing funding for its CLS-AX program, a Phase 3-ready treatment for wet age-related macular degeneration. The company has hired Piper Sandler to assist in evaluating options such as selling or licensing assets and potential mergers or partnerships. As part of cost-cutting measures, Clearside has transitioned all employees, including executives, to consulting roles and paused all internal research and development programs. Analysts from Citizens JMP and Needham have downgraded the stock, citing funding challenges, while H.C. Wainwright has adjusted its price target from $6.00 to $5.00, maintaining a Buy rating. Despite these challenges, Clearside’s SCS Microinjector technology continues to be used by partners like Bausch + Lomb and REGENXBIO.

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