Investec downgrades Smith & Nephew after study results disappoint

13th Oct 2014 09:36

Investec has cut its rating for medical technology group Smith & Nephew from 'add' to 'hold' after the company's disappointing results from a ulcer therapy study on Monday.The company said that the phase-3 study for HP802-247 in North America didn't meet its primary end-point, showing no statistically healing over the placebo, and differed with the strong results from the phase 2a and 2b trials.Investec said that HP802 was a "key asset" in the pipeline of Healthpoint Biotherapeutics, which Smith & Nephew acquired in 2012.However, the broker has made no changes to near-term forecasts because the treatment was not expected to be launched until 2017 with peak penetration predicted in 2021.Nevertheless, the target price for the stock has been trimmed from 1,100p to 1,023p as Investec increased the risk adjustment on HP802 to only a 25% chance of success.The shares were 1.1% lower at 980p by 09:51.