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Canaccord Genuity has revised its price target for Clene, Inc. (NASDAQ:CLNN), a biopharmaceutical company, reducing it to $86.00 from the previous $94.00 while still maintaining a Buy rating on the stock.
The adjustment follows Clene's recent financial moves, which include closing a registered direct offering and amending a debt agreement. These actions have secured the company's financial runway into the first quarter of 2025.
The financial stability gained by Clene is deemed significant as it extends past an upcoming critical event for the company: an in-person meeting with the U.S. Food and Drug Administration (FDA).
This meeting, expected to take place before the end of November 2024, is anticipated to provide insights into whether the FDA might consider a new drug application (NDA) for Clene's CNM-Au8, a treatment for amyotrophic lateral sclerosis (ALS), under the accelerated approval pathway.
Although the exact date of the FDA meeting has not been disclosed, the outcome is expected to be known in the fourth quarter of 2024. Canaccord Genuity has previously noted Clene's biomarker, survival, and trial data as sufficiently compelling to warrant further discussions with the FDA. The opportunity for Clene to present its case in person is viewed positively by the analyst firm.
The FDA's decision-making process is inherently unpredictable, but Canaccord Genuity expresses optimism. The firm believes that, given the current stock levels and the upcoming FDA meeting, Clene's shares are significantly undervalued.
In other recent news, Clene has modified its loan agreement with Avenue Venture Opportunities Fund, L.P., reducing the principal payment due on October 1, 2024, from $3.33 million to $2 million. This adjustment is contingent on Clene Inc. securing at least $10 million from equity sales by October 31, 2024.
Furthermore, the company has secured approximately $7.3 million through stock and warrant sales, with the proceeds expected to support the clinical development of its drug candidate, CNM-Au8®. This candidate is currently under review by the U.S. Food and Drug Administration (FDA) for its potential in treating amyotrophic lateral sclerosis (ALS) and multiple sclerosis (MS).
Additionally, Clene Inc. has been the recipient of Buy ratings from both EF Hutton and H.C. Wainwright, with price targets set at $23.00 and $31.00 respectively. The company has also implemented a 1-for-20 reverse stock split, reducing the common stock from approximately 128.7 million shares to around 6.4 million shares.
Lastly, Clene Inc.'s drug, CNM-Au8, has shown promising results in Phase 2 clinical trials for treating ALS and Rett Syndrome, further highlighting the company's ongoing efforts to address unmet medical needs in neurodegenerative diseases.
InvestingPro Insights
While Canaccord Genuity maintains a bullish outlook on Clene, Inc. (NASDAQ:CLNN), recent InvestingPro data and tips provide additional context for investors. The company's market capitalization stands at $39.41 million, reflecting its current valuation in the biotech sector.
InvestingPro Tips highlight that Clene is "quickly burning through cash" and "not profitable over the last twelve months," which aligns with the article's mention of the company's recent financial moves to extend its runway. This cash burn is typical for biotech companies in the development stage, especially as Clene approaches a critical FDA meeting.
The data also shows a significant revenue decline, with a -66.17% quarterly growth rate as of Q2 2024. This, coupled with the InvestingPro Tip that "analysts anticipate sales decline in the current year," underscores the importance of the upcoming FDA meeting for Clene's future prospects.
Despite these challenges, it's worth noting that Clene's gross profit margin stands at a robust 81.0%, indicating efficiency in its limited revenue generation. However, the negative operating income margin of -8166.29% reflects the substantial costs associated with drug development and regulatory processes.
For investors considering Clene's potential, InvestingPro offers 7 additional tips that could provide further insights into the company's financial health and market position. These tips could be particularly valuable as Clene approaches its pivotal FDA meeting in late 2024.
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