On Wednesday, JMP Securities adjusted its stance on Syros Pharmaceuticals (NASDAQ:SYRS), downgrading the stock from Market Outperform to Market Perform. The decision came after the company's Phase 3 SELECT-MDS-1 trial for a treatment combining tamibarotene and azacitidine did not achieve the primary goal of a complete response rate. In the trial, the combination treatment showed a complete response rate of 23.8%, which was not statistically significant when compared to the 18.8% rate for the placebo combined with azacitidine.
The trial's outcome was reflected in the stock's performance, as Syros Pharmaceuticals shares plummeted approximately 86% in the aftermarket on Tuesday, contrasting with the flat movement of the broader biotech sector, represented by XBI. JMP Securities noted the adverse event profile of the tamibarotene/azacitidine combination was consistent with previous clinical trials and the treatment was generally well-tolerated.
Despite the trial's underwhelming results, the analyst from JMP Securities recognized that the current stock valuation mirrors about 25% of the company's cash position at the end of the third quarter of 2024. The firm considers this valuation to be fair and in line with other biotech companies facing similar levels of uncertainty.
The downgraded rating indicates a shift in expectations for Syros Pharmaceuticals' near-term prospects. The company's stock performance and the outcome of the SELECT-MDS-1 trial are likely to be closely monitored by investors as they assess the impact of these developments on the company's future.
In other recent news, Syros Pharmaceuticals reported that its Phase 3 SELECT-MDS-1 trial did not meet its primary goal. The trial was testing tamibarotene combined with azacitidine in patients with higher-risk myelodysplastic syndrome (HR-MDS) exhibiting RARA gene overexpression. The company has decided to halt the trial and conduct a detailed review of the data to determine future steps.
During the company's Q3 2024 Earnings Call, Syros Pharmaceuticals disclosed no revenue for the quarter and a net loss of $6.4 million. Despite this, the company stated it has enough cash to fund operations into Q3 2025. The earnings call also highlighted the company's preparations for the commercial launch of tamibarotene and exploration of business development opportunities for the CDK7 inhibitor asset, 5609.
InvestingPro Insights
Recent data from InvestingPro sheds additional light on Syros Pharmaceuticals' financial situation following the disappointing trial results. The company's market capitalization stands at $73.19 million, reflecting the significant drop in stock price. InvestingPro Tips highlight that Syros is "quickly burning through cash" and "not profitable over the last twelve months," which aligns with the challenges faced by the company after the unsuccessful trial.
Despite the recent setback, InvestingPro data shows a strong return of 41.45% over the last month and 42.19% over the last three months, indicating some investor optimism prior to the trial results. However, the six-month return of -46.05% better reflects the overall downward trend.
An InvestingPro Tip notes that the stock's "price movements are quite volatile," which is evident in the recent sharp decline following the trial news. This volatility underscores the risks associated with biotech investments, especially those heavily dependent on clinical trial outcomes.
For investors seeking a more comprehensive analysis, InvestingPro offers 13 additional tips for Syros Pharmaceuticals, providing a deeper understanding of the company's financial health and market position.
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