SVB cuts Applied Molecular Transport to Market Perform, lowers target to $2

As previously reported, SVB Securities analyst Joseph Schwartz downgraded Applied Molecular Transport to Market Perform from Outperform with a price target of $2, down from $15, following the "disappointing" results from the Phase 2 LOMBARD study, which evaluated AMT-101 monotherapy in ulcerative colitis, or UC. The company also announced it is seeking a strategic partnership for a Phase 3 study in pouchitis and are preparing for a Phase 1b study with AMT-126 in UC. The analyst highlighted in a research note on Friday that after two disappointing readouts in UC, Applied Molecular Transport remains focused on preparing for a Phase 1b study with AMT-126 in UC, exploring a strategic partnership to advance AMT-101 into a Phase 3 study in pouchitis, and concluding the Phase 2 CASTRO study with AMT-101 in rheumatoid arthritis, or RA. While AMT-101 could still work in RA, and Schwartz is "encouraged" by the early data, including efficacy on C-reactive protein/CRP, this has not translated in the Phase 2 studies in difficult settings like UC, he argues. Additionally, if AMT-101 demonstrates efficacy in RA, this market is rather crowded and the disease is well treated with the current options, thus it is difficult to know what value AMT-101 could offer, the analyst adds.