Hold Rating Maintained for Synlogic Amidst Setbacks and Financial Uncertainties

Joseph Schwartz, an analyst from Leerink Partners, reiterated the Hold rating on Synlogic (SYBX – Research Report). The associated price target remains the same with $1.00.

Joseph Schwartz has given his Hold rating due to a combination of factors impacting Synlogic’s current position and future prospects. Schwartz acknowledges the setback from the discontinuation of Synlogic’s lead program, SYNB1934, which was aimed at treating phenylketonuria (PKU). The decision to halt the program followed a critical review of early-stage trial data indicating a lack of discernible trends in lowering phenylalanine levels among participants. This was a significant blow to the company’s portfolio, as the lead program often sets the stage for a biotech firm’s success and investor confidence. Furthermore, Schwartz points out that there is a low expectation for Synlogic’s remaining programs to be picked up for further development, which casts doubt on the company’s ability to drive future growth.
Synlogic’s financial health is also taken into consideration, with Schwartz noting that the company ended the first quarter of 2024 with $32.3 million in cash, cash equivalents, and short-term marketable securities. While the firm has some financial runway, the loss of its primary program and the ongoing search for strategic options suggest a period of uncertainty ahead. This financial position, combined with the operational challenges faced by the company, underpins Schwartz’s decision to reiterate a Market Perform rating and set a price target of $1. The Hold rating reflects a cautious approach, recognizing the company’s potential yet remaining mindful of the risks and uncertainties that lie ahead.

SYBX’s price has also changed moderately for the past six months – from $2.120 to $1.750, which is a -17.45% drop .

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Synlogic (SYBX) Company Description:

Synlogic, Inc. is a clinical-stage biopharmaceutical company, which engages in drug discovery and development of synthetic biotic medicines. It focuses on SYNB1020 and SYNB1618, which are orally administered and target hyperammonemia and phenylketonuria. It also works on SYNB1891, an intratumorally administered which treats cancer. The company was founded by Jim Collins and Tim Lu on August 28, 2017, and is headquartered in Cambridge, MA.