This analyst just slashed his price target on ProMIS Neurosciences

Roth Capital Partners analyst Boobalan Pachaiyappan cut his target on ProMIS Neurosciences (ProMIS Neurosciences Stock Quote, Chart, News, Analysts, Financials NASDAQ:PMN) to US$15.00 from US$29.00 following a 70% decline in its shares, but maintained his “Buy” rating, arguing that investors may be overstating the implications of a failed Alzheimer’s disease trial involving a competing treatment.

Pachaiyappan observed that ProMIS shares fell sharply Oct. 30 after Acumen Pharmaceuticals announced that its experimental Alzheimer’s treatment, Sabirnetug, failed to meet the primary and key secondary endpoints in a Phase 2 study.

“The sympathy sell-off appears to reflect concern that toxic oligomer targeting is fundamentally flawed,” Pachaiyappan said in his Nov. 2 report.

Both treatments target toxic forms of amyloid-beta proteins associated with Alzheimer’s disease, raising concerns that Acumen’s failure could indicate broader problems with the approach. However, Pachaiyappan said differences between the treatments make it premature to assume ProMIS’s PMN310 will produce similar results.

“We believe some negative read-through is warranted, but a one-for-one extrapolation is premature,” he said.

Acumen’s Phase 2 ALTITUDE-AD study failed to demonstrate meaningful improvements in cognitive outcomes despite reducing amyloid plaque in the brain. Approximately 10% of treated participants also developed amyloid-related imaging abnormalities involving swelling, known as ARIA-E. Acumen subsequently announced plans to discontinue Sabirnetug’s development.

ProMIS’s PMN310 is designed to recognize disease-associated forms of amyloid-beta while avoiding plaque, potentially allowing the treatment to target toxic proteins without some of the side effects associated with existing therapies.

Following discussions with management, Pachaiyappan said PMN310 may recognize a broader range of toxic protein assemblies than its description as an oligomer-selective antibody suggests.

“The relevant distinction is recognition of a disease-associated conformation across toxic assemblies—not a simplistic ‘oligomers only’ label,” he said. “This potentially addresses the concern that high selectivity excludes clinically relevant species, although binding breadth must still translate into patient benefit.”

The analyst also examined whether differences in antibody design could explain why PMN310 might perform differently from Sabirnetug. Management suggested that binding to amyloid plaque could reduce the amount of treatment available to target toxic soluble proteins, while PMN310’s IgG1 antibody structure may improve their clearance.

“A plaque sink could reduce antibody available for relevant soluble targets, but its magnitude at clinical exposure has not been established here,” Pachaiyappan said. “Similarly, greater effector function could improve clearance, but it is unclear whether isotype alone can explain the efficacy difference.”

ProMIS’s ongoing Phase 1b PRECISE-AD study enrolled 144 patients, with unblinded 12-month results expected in the first quarter of 2027.

Interim findings showed no cases of ARIA-E among 136 patients evaluated for safety. Pooled results also showed declines of approximately 15% in plasma pTau217 and 13.3% in cerebrospinal fluid MTBR-tau243, both biomarkers associated with Alzheimer’s disease. However, the results combined treated patients with placebo recipients, making it impossible to determine whether PMN310 caused the changes.

“These observations support continued investigation, but pooling active and placebo participants prevents attribution of the biomarker changes to PMN310,” Pachaiyappan said.

He believes the upcoming randomized results will be critical in determining whether the treatment’s biological effects translate into meaningful clinical benefits. “The decisive test is whether randomized Ph1b PRECISE-AD results connect target engagement, downstream biology and cognitive benefit—not simply a favorable ARIA profile,” he said.

Pachaiyappan said the analysis should consider differences between treatment and placebo groups across cognitive assessments and biological markers.

“We agree with this integrated framework. The key is whether the unblinded results show consistent treatment–placebo differences across clinical outcomes and supportive biomarkers,” he said. “Downstream tau changes, however, should not be construed as direct evidence of oligomer target engagement.”

Following Acumen’s disappointing results, Pachaiyappan lowered his estimated probability of approval for PMN310 to 30% from 40% and increased his discounted cash flow valuation’s discount rate to 11.5% from 11%. The revisions reflect greater uncertainty surrounding clinical success and future financing requirements.

Despite the lower target, he said ProMIS remains attractively valued, with shares closing Oct. 30 at US$3.53, below the company’s estimated cash holdings of US$5.96 per share. However, he cautioned that its cash position does not establish a minimum share valuation because ongoing clinical development will require additional spending.

“We believe PMN should be underwritten on its own randomized evidence—not assigned Sabirnetug’s outcome mechanically,” Pachaiyappan said. “Even under our revised assumptions, we believe the sell-off discounts more negative clinical read-through than the evidence supports and leaves little credit for PMN310’s potential.”

The analyst said investors willing to accept greater clinical risk could consider exposure before the anticipated first-quarter results, while more conservative investors may prefer to wait for evidence of efficacy.

“Our investment case rests on the value retained under more conservative assumptions—not on PMN310 having already been validated,” Pachaiyappan said.

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