Fed Governor Adriana Kugler to resign
Monday, Elevation Oncology (NASDAQ:ELEV), currently trading at $0.38, experienced a change in stock rating as TD Cowen analyst Marc Frahm downgraded the biotech company from Buy to Hold. The shift in rating comes amid news of Elevation Oncology’s planned acquisition by Concentra, which the analyst believes is the most favorable option for ELEV shareholders. The stock has seen a dramatic 91% decline over the past year, according to InvestingPro data.
Marc Frahm cited several reasons for the downgrade, including the company’s limited ability to create a distinct antibody-drug conjugate (ADC) program with the existing cash reserves, which are expected to last into the second half of 2026. While InvestingPro data shows ELEV maintains more cash than debt and a strong current ratio of 19.4, the company faces profitability challenges with negative EBITDA of -$45.66 million. Additionally, he pointed out the absence of near-term clinical catalysts and the current challenging financing environment for preclinical and early-clinical stage biotech companies.
The analyst expressed confidence in the acquisition deal, noting there is "little if any risk to the deal closing" and expecting the transaction to be completed as scheduled in July 2025. This anticipated smooth progression towards the acquisition’s closure has led to the adjustment in ELEV’s stock rating.
Frahm’s commentary suggests a strategic move for Elevation Oncology, as the acquisition by Concentra might provide the resources and support needed for the company to overcome the hurdles it currently faces. The analyst’s outlook on the deal’s closure and the timeline provided offer a clear expectation for investors regarding the company’s immediate future. With a market cap of just $22.74 million and trading below book value at a P/B ratio of 0.41, InvestingPro analysis suggests the stock is currently fairly valued. Subscribers can access 8 additional ProTips and comprehensive financial metrics for deeper analysis.
Elevation Oncology’s stock rating revision reflects the analyst’s assessment of the company’s current position and prospects within the industry, taking into account the broader market conditions affecting biotech firms at this stage of development. The new Hold rating indicates a neutral stance, advising investors to maintain their current position without further buying until the acquisition’s implications become more apparent. The company’s Financial Health Score stands at "Fair" according to InvestingPro metrics, with the next earnings report expected on August 6, 2025.
In other recent news, Elevation Oncology has entered into a definitive merger agreement with Concentra Biosciences, valuing the company at $0.36 per share in cash, along with a non-tradeable contingent value right (CVR). The merger has been unanimously approved by Elevation Oncology’s Board of Directors and is expected to close in July 2025, pending certain conditions. Meanwhile, Elevation Oncology has also announced promising preclinical data for its EO-1022, a HER3 antibody-drug conjugate, which demonstrated greater stability and anti-tumor activity in studies. The company plans to file an Investigational New Drug application for EO-1022 in 2026.
Additionally, Elevation Oncology has decided to prepay a $30 million term loan ahead of schedule, showcasing its financial capability. The prepayment includes the original principal, a prepayment fee, and accrued interest, with completion anticipated by May 2025. In a strategic shift, the company has ceased the development of its EO-3021 drug candidate due to insufficient efficacy, leading Piper Sandler to downgrade its stock rating from Overweight to Neutral. Piper Sandler’s analyst cited the decision to halt EO-3021 development as a primary reason for the downgrade, adjusting the price target to $0.70 from $10.00.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.