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Investing.com -- Shares of Galapagos (AS:GLPG) fell 6% on Wednesday after analysts at Deutsche Bank (ETR:DBKGn) downgraded the stock to “sell” from “hold,” citing growing uncertainty around the company’s direction and future strategy. The price target was lowered to €19 from €22.
The downgrade follows the biotech company’s second-quarter update and reflects concerns over the removal of cash guidance, ambiguity in corporate structure, and risks tied to ongoing business development efforts and cell therapy programs.
Galapagos has undergone a series of major strategic changes over the past year. In 2023, the company divested Jyseleca, its JAK inhibitor for inflammatory diseases, and shifted focus to oncology, specifically CAR-T cell therapies.
At the time, Galapagos said it would not be pursuing a leading position in the CAR-T space.
In January, Galapagos announced a further shift with plans to split the company and launch SpinCo, a separate entity aimed at acquiring and licensing assets in immunology, oncology, and virology.
Deutsche Bank analysts described the move as high-risk and not suited for risk-averse investors.
Deutsche Bank analysts said the lack of clarity surrounding the company’s structure and capital deployment strategy now outweighs the potential upside, prompting the downgrade.