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Investing.com -- Shares of Pliant Therapeutics, Inc. (NASDAQ:PLRX) tumbled 64% following the company’s announcement to halt enrollment and dosing in its Phase 2b trial of bexotegrast for idiopathic pulmonary fibrosis (IPF). The decision was prompted by a recommendation from the trial’s independent Data Safety Monitoring Board (DSMB), leading to a flurry of downgrades from analysts.
The company’s press release indicated that the enrollment and dosing for the BEACON-IPF trial were voluntarily paused to review data and understand the DSMB’s recommendation. While the study remains blinded to maintain integrity, Pliant has communicated the pause to clinical trial investigators and global regulatory authorities.
The news of the trial’s interruption has caused significant concern among investors, as bexotegrast is a key asset in Pliant’s portfolio. Analyst David Lebowitz from Citi downgraded the stock from Buy to Neutral, slashing the price target from $40.00 to $4.00. He stated, "We do not believe regulators played any role in initiating this pause. We hope to gain additional clarity on exactly what drove the DSMB’s recommendation in the coming days. Though we lack visibility into what challenges the BEACON-IPF trial pause presents, given that bexotegrast is key to Pliant’s valuation, the situation will remain a substantial overhang until fully resolved."
Similar downgrades came from Wells Fargo (NYSE:WFC), RBC Capital, and Oppenheimer, with analysts adjusting their expectations in light of the recent developments. Jeff Jones from Oppenheimer, who downgraded the stock to Perform, commented, "Given the pivotal nature of the trial this is being done while maintaining the blinded nature of the study. We move to Perform and remove our PT, while awaiting further clarity on the DSMB’s reason for recommending the pause, and the path forward for PLRX’s key asset bexotegrast."
H.C. Wainwright analyst Ed Arce also expressed caution, saying, "This could turn out to be nothing, or it could spell the end for bexotegrast, if it’s a serious toxicity event(s) deemed likely due to study drug." Canaccord Genuity’s Edward Nash adjusted his rating from Buy to Hold, setting a price target of $4.00.
As the market reacts to the uncertainty surrounding Pliant’s lead drug candidate, investors are closely monitoring the situation for any updates that may shed light on the future of bexotegrast and its impact on the company’s valuation.
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