BMO Capital analyst Evan Seigerman believes today’s selloff in Morphic shares is an overreaction to the United European Gastroenterology abstract. The abstract added a single data point, endoscopic improvement rate, to the previously announced MORF-057 EMERALD-2a data, the analyst tells investors in a research note. The firm says it is reasonable to expect more patients to reach the lower hurdle rate of endoscopic improvement versus the Mayo score. It adds that Morphic management emphasized that patients who responded improved markedly. BMO also emphasize this was a 12-week Phase 2a study of 35 patients, patients were given a range of doses, with some likely suboptimal. What the data don’t show, and what management emphasized, was that patients who responded improved markedly on drug despite limitations of a 35-patients study without dose optimization, writes the firm. BMO keeps an Outperform rating on Morphic with a $106 price target. The stock in afternoon trading is down 26% to $37.97.
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