Graphite Bio downgraded to Market Perform from Outperform at BMO Capital

BMO Capital analyst Kostas Biliouris downgraded Graphite Bio to Market Perform from Outperform with a price target of $7, down from $14. GPH101-driven pancytopenia in the first patient necessitated transfusions and growth factor administration, leading to a trial pause, Biliouris tells investors in a research note. The analyst believes the cause will attributed to the GPH101 manufacturing process rather than GPH101 MoA or off-target activity. However, this safety signal introduces additional risks in the platform and prolongs the development timeline by one year year in a "highly competitive space," writes Biliouris. As such, the analyst expects we expect significant pressure on Graphite shares.