H.C. Wainwright cuts Compass Therapeutics stock price target on FDA trial recommendation

H.C. Wainwright has reduced its price target for Compass Therapeutics (NASDAQ:CMPX) stock to $12 from $24, maintaining a Buy rating. The stock has fallen 32% this week, reaching $1.24, due to investor worries about the regulatory path. The firm lowered its target after the FDA suggested Compass conduct a trial proving a survival benefit before applying for a biologics license for tovecimig in advanced biliary tract cancer patients.

This announcement led to 8 analysts lowering their earnings estimates for the upcoming period, according to InvestingPro. The FDA's recommendation follows promising study results, showing a 18% objective response rate compared to 5.3%, and a 4.7-month progression-free survival benefit versus 2.6 months. However, overall survival was not statistically significant, with 8.9 months for tovecimig plus paclitaxel versus 9.4 months for paclitaxel alone.

Compass believes the overall survival result is due to crossover patients and does not think a new trial is needed before submission. The company will continue to work with the FDA while preparing a filing.