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Galapagos (NASDAQ:GLPG) American depository shares fell 2.1% in premarket commerce after BofA downgraded the agency to Underperform as few catalysts emerge within the close to time period.
“A pre-commercial stage biotech growing therapies for oncology and immunologic issues, GLPG’s enterprise worth has remained caught at unfavourable $1.5-2bn EV for over 2 years and we don’t see a close to/medium-term repair,” the analysts mentioned.
The analysts mentioned the score minimize can also be over considerations that the inventory stays a price entice.
The agency’s key most cancers pipeline has ~three to 4 years to market and has a excessive money burn fee, together with unclear differentiation in extremely aggressive end-markets, BofA mentioned.
“Additional, the corporate’s M&A concentrate on early-stage belongings limits the chance that buyers will unwind the heavy money low cost priced in inventory. Thus, we don’t anticipate an upside till we see a clearer path to worth creation,” the be aware acknowledged.
The be aware additionally noticed that GLPG is a “late mover” in most key markets. thus, the analysts see a smaller business alternative for GLPG’s CAR-T candidates.
“To this point, GLPG’s lymphoma CAR-T appears no higher than opponents in a crowded market,” the analysts mentioned, including they see 2024 as a comparatively catalyst-light 12 months for GLPG.
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