NEW YORK (TheStreet) -- Shares of Intra-Cellular Therapies (ITCI) - Get Report were tumbling 65.41% to $14.60 on heavy trading volume pre-market Thursday as the biopharmaceutical company's phase III trial of its schizophrenia drug was unsuccessful.
The drug failed to reduce patients' schizophrenia symptoms when compared to a placebo. A third set of patients was given risperidone, an approved schizophrenia drug, and saw their symptoms improve.
TheStreet's Adam Feuerstein said blaming the study's failure on a high placebo response rate "falls flat" since risperidone had "no trouble" beating the same placebo.
SunTrust subsequently downgraded the New York-based company's stock to "neutral" from "buy" and cut its price target to $15 from $60 based on the trial results, according to TheFly.
Additionally, Leerink slashed its price target to $29 from $95, but said the recent selloff was "overdone." The firm reiterated its "outperform" rating.
Leerink added that the schizophrenia drug should not "be assumed dead." Intra-Cellular can still file for the drug's approval with the FDA and the company has other drug developments underway.
Piper Jaffray analysts called the selloff a "buying opportunity," TheFly reports.
The firm reduced the company's price target to $22 from $57 and maintained its "overweight" rating.
Piper Jaffray said it still believes the drug is a viable, differentiated drug candidate for treating psychosis and other symptoms.
About 1 million of the company's shares have changed hands so far today vs. its average volume of 498,705 shares per day.
Separately, TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this articles's author. TheStreet Ratings has this to say about the recommendation:
TheStreet Ratings team rates Intra-Cellular Therapies as a Sell with a ratings score of D+. This is driven by a number of negative factors, which it believes should have a greater impact than any strengths, and could make it more difficult for investors to achieve positive results compared to most of the stocks it covers. The company's weaknesses can be seen in multiple areas, such as its feeble growth in its earnings per share, deteriorating net income and generally disappointing historical performance in the stock itself.
You can view the full analysis from the report here: ITCI