On Monday, Canaccord Genuity maintained a Buy rating on CervoMed (NASDAQ:CRVO) and raised the share price target to $65 from $50. The adjustment follows CervoMed's recent fourth-quarter results and annual report filing. The company's operating expenses of $4 million matched the analyst's projections.
CervoMed's key drug, neflamapimod, is currently undergoing a Phase 2b confirmatory trial for dementia with Lewy bodies (DLB), and the company is on schedule to complete enrollment by the second quarter of 2024. The timeline for releasing top-line data has been refined to the fourth quarter of 2024, previously projected for the second half of the same year.
The firm also highlighted CervoMed's successful capital raise, which ensures a cash runway through the end of 2025, considering additional government grants and $50 million from recent financing. This financial stability has shifted investor attention to the anticipated Phase 2b data release in the fourth quarter of 2024.
Canaccord Genuity's stance on CervoMed remains unchanged since their initial coverage, emphasizing the company's methodical approach to clinical trials and its focus on a less competitive indication compared to Alzheimer's disease.
CervoMed's strategic use of biomarker-based targeting for DLB patients most likely to benefit from neflamapimod is seen as a significant step towards mitigating risks associated with treating this challenging condition.
If neflamapimod gains approval, it is expected to generate multi-billion dollar sales in the U.S. market. With a market cap of approximately $200 million, Canaccord Genuity views CervoMed as substantially undervalued and anticipates the stock to progressively increase as the data release in the fourth quarter of 2024 approaches. The firm reiterates its Buy recommendation ahead of the forthcoming Phase 2b trial results.
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