Mackie Research analyst Andre Uddin has downgraded Algernon Pharmaceuticals (Algernon Pharmaceuticals Stock Quote, Chart, News, Analysts, Financials CSE:AGN) after weak COVID-19 clinical results with the company\u2019s lead compound Ifenprodil. In an update to clients on Wednesday, Uddin moved AGN from a \u201cSpeculative Buy\u201d to a \u201cHold,\u201d saying investors should now be focusing on Algernon\u2019s data for its idiopathic pulmonary fibrosis trial, due in the second half of 2021. Algernon\u2019s share price dropped significantly on Wednesday as the market reacted to top line data from the company\u2019s Phase 2b\/3 COVID-19 trial of Ifenprodil in hospitalized moderate to sever COVID-19 patients. The Phase 2b part involving 150 subjects found no dose-dependent response. Algernon said it intends to discuss the results with the US FDA once the final data has been reviewed. \u201cThe Company has done a tremendous amount of work in a very short period of time to get to this stage to see if Ifenprodil could help in the world\u2019s fight against COVID-19,\u201d said Christopher J. Moreau, CEO of Algernon, in a Wednesday press release. \u201cWe look forward to completing our data review and receiving feedback from the U.S. FDA.\u201d The primary endpoint of the Phase 2b study was patient clinical status based on the WHO seven-point ordinal scale at Day 15, with secondary endpoints including all-cause mortality, blood oxygen levels, time in the ICU and time to mechanical ventilation. On the WHO score, Ifenprodil missed the primary endpoint by showing no difference from the control group, while on all-cause mortality, the drug showed a very small non-significant improvement compared to the control group. On oxygenation, 100 per cent of patients with low blood oxygen on Ifenprodil returned to normal oxygen levels at Day 4 compared to Day 9 for patients in the control group, and on time in ICU, patients on the drug spent significantly less time in the ICU than those in the control group. Commenting on the results, Uddin wrote, \u201cThe lack of a dose-dependent effect in a clinical trial normally suggests poor efficacy of a compound. AGN disclosed 40 mg ifenprodil did not show any effects in this study while the 20 mg dose demonstrated some trends. Based on the lack of dose response, we unfortunately would not expect this indication to be advanced.\u201d Drug developer Algernon focuses on repurposing small molecule drugs that have been approved and genericized outside of the US for new indications in the US market. Currently, Algernon has four candidates in its pipeline, with Ifenprodil targeting COVID-19 and idiopathic pulmonary fibrosis (IPF) and chronic cough. Other targeted indications include chronic kidney disease, non-alcoholic steatohepatitis and inflammatory bowel disease. Uddin said it\u2019s time to shift away from COVID-19 and onto the rest of the pipeline. \u201cIfenprodil is in a Phase 2a trial in IPF\/chronic cough where results are expected in H2 2021, and AGN\u2019s DMT (a repurposed psychedelic compound) is expected to enter into a Phase 1 trial in stroke in H2 2021,\u201d Uddin wrote. \u201cInvestors should re-focus their attention towards the IPF\/cough data expected in H2 \u201921.\u201d \u201cInvestors should note our AGN valuation is based on the IPF and chronic cough indications of ifenprodil \u2013 we are currently keeping our financial assumptions for the two indications intact in our model. We never assumed any revenues from ifenprodil\u2019s COVID-19 indication,\u201d he said. Along with the new \u201cHold\u201d rating, Uddin has cut his price target from $0.80 to $0.25, saying the drop is due to a decrease in assumed success rate for Ifenprodil. At the time of publication, the new target represented a projected one-year return of negative 15 per cent. Algernon announced earlier this month it has filed a pre-IND (Investigational New Drug) meeting request with the US FDA for its psychedelic compound DMT for the treatment of stroke-related dysfunction, part of the company\u2019s stroke clinical research program launched in February. Having established the program, Algernon announced on March 29 that it has been added to the Horizons Psychedelic Stock Index ETF. \u201cBeing added to the PSYK is a reflection of the important work Algernon has undertaken with its DMT stroke research program and will help bring a further level of awareness to the Company among a wide range of investors,\u201d said Moreau in a press release. Algernon, whose share price rose 300 per cent in 2020 from $0.055 to $0.22, started off 2021 with a company update in which it laid out its plans for: (a) establishing one or two new clinical programs, with Phase 1 or 2 trials to be announced before the end of the year; (b) finishing enrolment for its IPF and chronic cough study (which had been slowed by work on Ifenprodil for COVID-19); and (c) carrying out its COVID-19 clinical trials. \u201cThe Company is in a unique position to leverage its capabilities in identifying compounds for repurposing and managing clinical trials, and to advance additional compounds into clinical studies in a timely and cost-effective manner,\u201d said Moreau in a January 7 press release. \u201cOur CSO Dr. Mark Williams and I have stated many times that one of our key corporate goals was to have multiple compounds in clinical trials at the same time in order to improve our chances of a success, and that is what we intend to achieve,\u201d he said.