H.C. Wainwright downgrades Axcella with discontinuation ‘major detriment’

H.C. Wainwright analyst Ed Arce downgraded Axcella Health to Neutral from Buy without a price target. The company announced a strategic repositioning and restructuring plan to focus solely on its long COVID program, and as a result is discontinuing its ongoing Phase 2b trial of AXA1125 in nonalcoholic steatohepatitis, Arce tells investors in a research note. The analyst regards the discontinuation of the AXA1125 program to be a "major detriment" to the valuation of Axcella shares. He also sees a limited number of options for Axcella to successfully finance a planned Phase 2b long COVID study due to a lack of near-term catalysts. Axcella Health shares are down 25% to 67c in midday trading.