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Investing.com - Wedbush downgraded Generation Bio Co. (NASDAQ:GBIO) from Outperform to Neutral on Wednesday, maintaining a price target of $7.00 following the company’s earnings report and announcement of a major restructuring plan. The stock, currently trading at $4.05, has declined nearly 84% over the past year, according to InvestingPro data.
The biotechnology company revealed plans for a strategic restructuring that includes a 90% reduction in its workforce, to be completed by the end of October. Despite the dramatic staffing cuts, Generation Bio intends to maintain its core research and development capabilities during the initial restructuring phase. InvestingPro analysis shows the company has been quickly burning through cash, though it maintains a healthy current ratio of 8.43, indicating strong short-term liquidity.
The company will continue work on its lead siRNAs targeting LAT1 and VAV1, as well as a ctLNP delivery system targeted toward T cells, while it explores strategic alternatives. Wedbush cited the indefinite postponement of lead candidate selection and development plans as key factors in its downgrade decision.
Generation Bio reported ending the quarter with $141.4 million in cash, cash equivalents, and marketable securities. This relatively healthy cash position, combined with the workforce reduction, provides some potential for share appreciation.
Wedbush’s $7 price target is based on Generation Bio’s anticipated cash position in one year, with the firm projecting the company’s cash per share to reach approximately $7 by the third quarter of 2026.
In other recent news, Generation Bio Co . has announced a significant restructuring plan that includes reducing its workforce by approximately 90% by the end of October 2025. This decision comes as the company evaluates strategic alternatives, with TD Cowen retained to explore options such as potential acquisitions, mergers, or asset sales. Additionally, Generation Bio will implement a 1-for-10 reverse stock split, effective July 21, 2025, reducing the number of outstanding shares to 6.7 million. This move was approved by stockholders during the company’s Annual Meeting. In light of these developments, Jefferies has lowered its price target for Generation Bio from $40 to $12, although it maintains a Buy rating on the stock. The price target adjustment follows the company’s announcement regarding strategic evaluations for its pipeline, which includes various innovative technologies. These recent developments highlight significant changes within Generation Bio as it navigates its future strategy.
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