RBC Capital cuts NewAmsterdam Pharma stock price target on trial risk

RBC Capital reduced its price target on NewAmsterdam Pharma Co NV shares to $42 from $50, maintaining an Outperform rating. This decision came after the firm expressed concerns about the company's Phase III PREVAIL interim analysis in a research note released on Sunday. The stock, currently trading at $23.03, has lost 34% of its value year-to-date and is close to its 52-week low of $21.02, indicating increased investor caution heading into the interim results.

RBC Capital believes there is a 35-38% chance of success for PREVAIL's interim analysis, citing the potential for too few MACE-3 events as a significant risk. However, the firm also noted that its assumptions might be more conservative than necessary, and sees a high probability of success for the final analysis by the end of 2027.

The price target cut reflects both caution over the interim analysis and a more negative investor sentiment. Despite the concerns, RBC Capital still sees a potentially favorable risk/reward ratio at current levels. NewAmsterdam Pharma holds more cash than debt on its balance sheet, providing financial flexibility as it progresses through clinical development.

The company recently received regulatory approval for its obicetrapib and ezetimibe fixed-dose combination in the European Union. NewAmsterdam Pharma's CEO, Michael H. Davidson, also recently increased his stake in the company by purchasing 10,000 shares. These developments continue to influence investor sentiment on NewAmsterdam Pharma.