What happened
The stock of clinical-stage biotech Compugen (CGEN +4.03%) wasn't the picture of health on Wednesday. An analyst tracking the company downgraded his recommendation on it, and investors reacted by trading the shares down by more than 10%.
So what
Well before market open that day, Jefferies prognosticator Chris Howerton changed his Compugen recommendation to underperform -- sell, in other words -- from his previous hold. That wasn't his only ding on the stock; he also halved his price target to $0.50 per share from the preceding $1.00 (it currently trades at barely over $0.84).
Howerton's reasoning wasn't immediately apparent. While Compugen has had its struggles, the biotech still holds great promise for many, and opinion on its viability can differ considerably. For example, early in January, EF Hutton analyst Tony Butler initiated coverage of the stock with an unhesitant buy recommendation at a comparatively very high price target of $13.
In his research note, Butler pointed out that Compugen has no less than three clinical-stage programs that harness immunotherapies to target various cancers. Oncology is a very hot area of biotech, so if any of the three treatments come to market, Compugen could benefit very handsomely.
NASDAQ: CGEN
Key Data Points
Now what
It is always helpful to remember that biotech stocks are frequently volatile, particularly if they undergird clinical-stage companies like Compugen that regularly book bottom-line losses.
Regardless of changes in analyst sentiment, though, with its oncology pipeline, this particular company is well worth watching for any investor involved with or curious about the biotech sector.
