Tuesday, H.C. Wainwright has adjusted the price target for Mustang Bio (NASDAQ:MBIO), a biopharmaceutical company, to $2.00 from the previous $25.00 while maintaining a Buy rating on the stock. This significant change comes after Mustang Bio recently engaged in a series of public offerings aimed at addressing financial concerns and supporting its clinical programs, especially the MB-106 asset.
Mustang Bio's fundraising efforts included a public offering of common stock and three warrant issues, which together could bring up to $16 million in proceeds, with $4 million secured at the closing. These financial maneuvers have increased Mustang's pro forma cash position to approximately $11.0 million. The capital raise is primarily to support the company's ongoing and future clinical trials.
The company has achieved several key milestones for its MB-106 asset. In the first quarter of 2024, Mustang Bio successfully completed an End-of-Phase 1 (EOP 1) meeting with the U.S. Food and Drug Administration (FDA) regarding a potential pivotal Phase 2 single-arm clinical trial for Waldenström macroglobulinemia (WM). The FDA agreed with the proposed design at the recommended dose and requested only minor modifications to the study protocol.
Positive data from the multi-center trial of MB-106 in treating lymphomas, including WM, was presented at the American Society of Hematology (ASH) meeting in 2023. The results from the Phase 1 trial for indolent lymphoma may support an accelerated Phase 2 registrational strategy for WM. Dosing for this next phase is expected to begin in 2024.
The analyst justifies the reduced price target to $2.00, citing the dilution effect from the recent capital raise transactions as the primary reason. Despite the lower price target, the firm reiterates its Buy rating on Mustang Bio shares.
InvestingPro Insights
In light of the recent financial developments at Mustang Bio (NASDAQ:MBIO), InvestingPro data provides additional context for investors considering the company's stock. With a market capitalization of just $3.02 million and a significant decrease in price over various time frames, including a one-year total return of -94.42%, the company’s financial stability is a point of interest for potential investors. The stock is currently trading at a mere 3.18% of its 52-week high, and with a Price / Book ratio of 24.53 as of the last twelve months ending Q4 2023, it is trading at a high multiple despite the absence of dividends and profitability.
Two InvestingPro Tips highlight key considerations: Mustang Bio holds more cash than debt, providing some financial buffer, and the stock’s Relative Strength Index (RSI) suggests it is in oversold territory, which might interest contrarian investors. However, the company is quickly burning through cash and analysts do not anticipate profitability this year, which could concern those looking for near-term financial stability. For those seeking a deeper analysis, there are 18 additional InvestingPro Tips available, offering a comprehensive understanding of Mustang Bio's financial health and stock performance. To access these insights, visit https://www.investing.com/pro/MBIO and consider using the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription.
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