Passage Bio (PASG) faces a tougher path after US regulators told the company it will need to run a randomized study to support approval of its experimental treatment PBFT02, a move that adds time, cost, and uncertainty, Wedbush Securities said Tuesday in a report.
A randomized trial of PBFT02 for frontotemporal dementia would be expensive and slow, though the condition has no approved treatments, the report said.
Biomarker results from the ongoing study still look promising, and new MRI data adds support that the therapy could help patients, Wedbush said.
Wedbush downgraded Passage Bio's stock to neutral from outperform and cut its price target to $8 from $32 after removing PBFT02 from its valuation, saying the treatment may still have potential but the regulatory hurdles are now too high to support a more positive view.
Passage Bio ended 2025 with $46.3 million in cash, and Wedbush's new price target reflects projected cash per share by the end of 2026 after double-digit operating-expense cuts in the coming quarters, according to the report.
Price: $6.01, Change: $-0.24, Percent Change: -3.84%