William Blair downgrades Tenax Therapeutics stock rating on trial results

William Blair adjusted its rating on Tenax Therapeutics (NASDAQ:TENX) stock to "Market Perform" from "Outperform" on Monday, following negative results from the company's LEVEL trial. The clinical trial failed to meet its primary endpoint, which was measured by the six-minute walk distance. Although levosimendan demonstrated consistent benefits on NT-proBNP and hemodynamic changes that could yield long-term benefits, the disappointing trial results raised concerns.

The downgrade occurred as Tenax Therapeutics' shares plummeted by 90%, trading at $1.36 from a previous close of $13.31. The stock is currently near its 52-week low of $5.78, with the company holding more cash than debt on its balance sheet, providing a crucial financial buffer. William Blair noted that the stock is trading in line with the assumptions that shares would trade around cash if the LEVEL trial failed.

The firm highlighted the ongoing challenges with six-minute walk distance endpoints and subgroup analyses, suggesting significant risk remains. Additionally, Tenax Therapeutics is conducting a Phase III LEVEL-2 trial, potentially amending enrollment criteria to focus on patients with more severe disease burden. Despite recent analyst updates, such as Guggenheim raising its price target to $40 with a Buy rating and Piper Sandler increasing it to $50, Tenax Therapeutics continues to face uncertainties as it pursues its cardiovascular treatment goals.