Roche (RHHBY (OTC:RHHBY)) shares fell 3% in Europe today, hitting the lowest point in five years.
This drop comes in the wake of a disappointing trial outcome for the Swiss drugmaker's gene therapy developed in collaboration with Sarepta Therapeutics (NASDAQ:SRPT) for Duchenne muscular dystrophy.
The trial did not achieve its primary objective, which has raised concerns among investors and analysts.
JPMorgan reacted to this development by lowering its price target on Roche and anticipates that consensus estimates will need to be revised downward in light of this news.
Analysts see “limited scope for margin expansion” and hence forecast 2024 Core EPS of CHF19.45.
“This puts our 2024 forecast 4% below Consensus, with our forecasts also 6% to 8% below Consensus for 2025-2027, suggesting the potential for further downgrades,” analysts wrote in a note.
“With the announcement last night that SRP-9001 failed to meet its primary endpoint in the EMBARK trial we expect Consensus to remove sales of the product in Roche’s territories, leading to c. SFr0.8bn Consensus cuts in 2026. Furthermore, we continue to see the next pipeline readout, the TIGITSKYSCRAPER-01 as also high risk,” they added.
The new price target at JPMorgan is CHF245, down from the prior CHF260.
The broker rates Roche shares as Underweight.