Cortexyme (CRTX) stock forecast: Can the drug maker recover?
Uncertainty abounds for Cortexyme (CRTX). Will a disappointing end to October have a lasting impact on the company?
The stock lost more than three quarters of its value following the failure of the Atuzaginstat drug in a Phase 3 trial. The price has since treaded water, with gains erased as quickly as they are added in the last two months. Can the stock recover? What factors are shaping the Cortexyme share price forecast?
Cortexyme went public on 9 May 2019 through an initial public offering (IPO). The pharmaceutical company is developing drugs to combat Alzheimer’s, Parkinson’s and COVID-19.
Cortexyme stock analysis after 76% crash
Since its market debut at £17 a share in 2019, Cotexyme has struggled. After reaching a record high of $120 on 10 August, the price action moved sideways to lower before crashing to $13.51 on 27 October on the back of the disappointing trial results and analysts’ downgrades.
Since then the stock moved largely sideways, and is currently trading at $12.46 (as of 21 December), with a market cap of $372.28m.
Technical indicators are mixed for Cortexyme. One-day oscillators are slightly skewed towards ‘buy’, with the company’s Momentum and MACD Level giving bullish signals. The relative strength index (RSI) of 31.69 reflects an oversold or undervalued condition.
Moving averages however give ‘strong sell’ signals, with 12 of the 15 metrics skewed towards sell.
Disappointing clinical results
Cortexyme’s long-term success could be dependent on its ability to succeed in developing pharmaceutical treatments. This was evident on 27 October, when shares fell 76% in just one day after the pharma company announced that it had missed its goal in Phase 3 trials for Atuzaginstat, a possible treatment of Altzeihmer’s disease.
The failure to discover an improvement in two measures of cognition for every patient enrolled in its study led to multiple analysts, including Bank of America, downgrading the stock, which lost more than $1.3bn of market cap value on the day.
The Federal and Drug Administration (FDA) placed a clinical hold on the drug in February 2021.
The drug racked up costs of $19.6m in the nine months to September 2021 and $32.9m in the same period for 2020. This limited investment in other drugs the company develops, none of which are beyond Phase 1.
In other Cortexyme stock news, shortly after the disappointing trial results, the company announced that Atuzaginstat showed a 30 - 50% slowing of cognitive decline when taken in a lower dose of 40mg.
“Our ability to identify the right population in historically hard to treat mild to moderate Alzheimer’s patients, along with finding an efficacious dose with a differentiated safety profile, is important progress toward a breakthrough treatment for Alzheimer’s disease,” Michael Detke, Cortexyme’s chief medical officer, said in a press release.
Atuzaginstat is in a relatively small pool of researchers into Alzheimer’s treatments, with a review by the Translational Research and Clinical Interventions journal showing 152 clinical trials, as of 2021.
The drug was in the biggest pool of Disease Modifying Treatments, but its progress to a more advanced stage should allow for short-term identification as to whether the drug can return revenues.
If the latest results were indeed signs of positive developments in Cortexyme’s future research, it has not yet been priced in by investors, with the stock still trading close to its October lows.
Latest results reveal consistent losses
Cortexyme remains a company in a growth phase, posting consistent losses in the expectation of strong future revenue streams, a strategy disrupted by disappointing clinical results for Atuzaginstat.
Latest earnings for the third quarter of 2021 revealed a $21.7m net loss, broadly in line with the figure for the same period last year. Earnings per share (EPS) came at -$0.73, in line with analysts’ estimates.
Research and development costs at $14.04m weighed heaviest on the company’s balance sheet, while general and administrative costs at $7.6m were up 55%.
Cortexyme’s deficit grew to $213.2m, following increasing losses between 2018 and 2020. With no drugs commercially available for sale, future losses now look likely to exceed the expectations of investors.
While Atuzaginstat remained the primary source of drug-development expense, its costs fell by 62.4%, while development costs of COR588, a potential treatment for periodontal disease, increased by 216%.
Cortexyme (CRTX) stock forecast
According to data gathered by Marketbeat, Cortexyme’s stock price predictions suggest a significant upside.
The average 12-month Cortexyme price target based on five analysts’ views currently sits at $38.50, ranging from the low of $15 to the high of $75.
The stock has a ‘hold’ consensus recommendation, with three analysts rating Cortexyme as a ‘buy’, one as a ‘hold’ and one giving a ‘sell’.
The latest Cortexyme share price forecasts were presented on the day of the company’s update on its Alzheimer’s drug.
Of the three analysts offering a price target on the day, Bank of America gave the most pessimistic outlook, downgrading the stock from ‘neutral’ to ‘underperform’ and lowering the price target from $58 to $15 – a 73.99% downside on the 27 October share price and closely tracking the 76.58% tumble that same day.
HC Wainwright cut its price target from $200 to $30. Canaccord Genuity halved their price target from $150 to $75.
Wallet Investor is one algorithm-based forecasting service offering a Cortexyme share price target for 2022-2025.
The service projects a strong level of turbulence for the stock in 2022, before stabilising as it approaches $64 by 2025. The stock’s 2023 peak is forecast to be $51.81, rising to $62.05 in 2024.
Note that price predictions can be wrong. Forecasts should not be used as a substitute for your own research. Always conduct your own due diligence before investing. And never invest or trade money you cannot afford to lose.
FAQs
Is Cortexyme stock a good buy?
The stock has a ‘hold’ consensus recommendation based on five analysts’ views gathered by MarketBeat, with three analysts rating Cortexyme as a ‘buy’, one as a ‘hold’ and one giving a ‘sell’.
Note that analyst forecasts can be wrong and should not be used as a substitute for your own research. Always conduct your own due diligence before investing. And never invest or trade money you cannot afford to lose.
Why has Cortexyme stock been going down?
Cortexyme fell by 76% on 27 October 2021 following disappointing clinical results on its Alzheimer’s drug Atuzaginstat and consequent analysts’ downgrades. The price fell below its IPO price of $17. It has failed to pick up momentum since, with little news to report and no other drugs in late-stage trials.
Will CRTX stock go up?
The average 12-month Cortexyme price target based on five analysts’ views gathered by MarketBeat currently sits at $38.50, ranging from the low of $15 to the high of $75.
There are a number of clinical risks that could continue to punish the stock in the near term before the company begins to return revenue.
Note that analyst forecasts can be wrong and should not be used as a substitute for your own research. Always conduct your own due diligence before investing. And never invest or trade money you cannot afford to lose.
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