Clinical stage drug developer Algernon Pharmaceuticals (Algernon Pharmaceuticals Stock Quote, Chart, News, Analysts, Financials CSE:AGN) just received a rating upgrade from Research Capital analyst Andr\u00e9 Uddin, who in a report to clients on Monday moved from \u201cHold\u201d to \u201cSpeculative Buy\u201d while maintaining his $0.25 per share target. Algernon\u2019s share price has dropped by more than 45 per cent since the end of March when the company released topline data from its Phase 2b\/3 COVID-19 trial of ifenprodil in hospitalized moderate to severe COVID-19 patients. The results of the 150-person trial found no dose-dependent response. Vancouver-based Algernon focuses on repurposing small molecule drugs that have been approved and genericized in markets outside of the United States for new indications in the US market. Currently, Algernon has five repurposed drug candidates in its pipeline which are targeting multiple indications including COVID-19, IPF, chronic cough, CKD, NASH, IBD and stroke. For the Phase 2b\/3 trial, the primary endpoint had been 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. By that measure, ifenprodil missed by showing no difference from the control group, while on all-cause mortality there was a non-significant improvement compared to control. \u201cOverall, the results were weak with no dose-dependent responses observed,\u201d said Uddin, who in a March 31 report moved AGN from \u201cSpeculative Buy\u201d to \u201cHold.\u201d \u201cHowever, 20mg ifenprodil significantly reduced patients\u2019 time in the ICU when compared to control. We downgraded AGN on March 31st, 2021 \u2013 since then, the stock has been down 47 per cent,\u201d Uddin wrote. On April 26, Algernon announced filing an end of Phase 2 meeting request (EOP2) with the US FDA based on the completion of the Phase 2b part of the COVID trial for ifenprodil. Algernon said it expects a response within 70 days although the waiting period could be expedited. \u201cThe purpose of an EOP2 meeting is to facilitate interaction between the FDA and sponsors who seek guidance related to clinical trial design, to determine the safety of proceeding to Phase 3, to evaluate the Phase 3 plan, including protocols and endpoints for adequacy, and to identify information necessary to support a marketing application,\u201d said Algernon in a press release. Overall, Uddin called Algernon \u201can investment opportunity with very high risk,\u201d with his $0.25 price target representing at the time of publication a projected one-year return of 56 per cent. With his new update, Uddin said AGN has a number of catalysts expected in 2021. \u201c(i) AGN has recently filed an end-of-Phase 2 (EOP2) meeting request with the FDA to discuss advancing ifenprodil to the Phase 3 part of the Phase 2b\/3 trial in COVID-19 and design of the Phase 3 part, as well as, data necessary to support an NDA filing in the future. Despite the lack of a dose response, we expect the FDA to give the green light to the Phase 3 part of the trial, which could commence this year. (ii) Ifenprodil is in a Phase 2a trial in idiopathic pulmonary fibrosis (IPF)\/chronic cough \u2013 results are expected in H2 2021. (iii) DMT (a repurposed psychedelic compound) is expected to enter into a Phase 1 trial in stroke in H2 2021,\u201d Uddin wrote. The analyst also commented on Algernon\u2019s second quarter financials, which came in with revenue at $0.0 million compared to the same last year and a net loss of $2.4 million or $0.02 per share compared to a loss of $0.8 million or $0.01 per share a year earlier. By the end of its fiscal Q2 (February 28), Algernon reported $3.1 million in cash and zero debt on its balance sheet, while in March the company closed on a $2.8-million financing round at $0.25 per unit. For his part, Uddin had called for fiscal Q2 revenue and earnings of $0.0 million and a loss of $4.5 million or $0.03 per share, with the analyst qualifying that financials are not important as AGN is a clinical-stage drug development company. Uddin is calling for AGN to stay at nil revenue in 2021 and 2022 and to hit $31.5 million in sales by 2025. On fully diluted EPS, he is calling for a 2021 loss of $0.09 per share and for a 2022 loss of $0.07 per share. By 2025, Uddin has AGN hitting positive earnings at $0.04 per share. At the end of March, Algernon announced that it had been added to the Horizons Psychedelic Stock Index ETF, the world\u2019s first ETF for North American companies exposed to the psychedelics industry, in its first quarterly rebalance of holdings. \u201cOn February 1, 2021, Algernon announced that it had established a clinical research program for the treatment of stroke focused on AP-188 (\u201cN,N-Dimethyltryptamine or DMT\u201d), a known psychedelic compound,\u201d said Christopher J. Moreau, Algernon CEO, in a March 29 press release. \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 Moreau said.