TD Downgrades Milestone Pharmaceuticals: Etripamil Uncertainty Looms

In the fast-paced world of biotech, where fortunes can rise and fall on a single FDA decision, Milestone Pharmaceuticals (MIST) has found itself in the eye of the storm. TD Cowen, a prominent investment firm, has downgraded Milestone from a "Buy" to a "Hold" rating, suspending its price target in the wake of the FDA's Complete Response Letter (CRL) for the company's flagship product, etripamil nasal spray. The CRL, issued on March 28, 2025, has thrown a wrench into Milestone's plans, raising concerns about nitrosamine impurities and facility compliance, and casting a shadow over the company's financial outlook.



The FDA's CRL is a significant setback for Milestone, which had been gearing up for the imminent launch of etripamil, a novel calcium channel blocker designed to treat paroxysmal supraventricular tachycardia (PSVT). The CRL has not only delayed the launch but also raised questions about the company's ability to navigate the regulatory landscape and secure additional funding. With $69.7 million in cash, cash equivalents, and short-term investments as of December 31, 2024, Milestone has some financial cushion, but the uncertainty surrounding the NDA resubmission and the potential delay in launch could make the company a riskier investment.

The CRL has also led to a downgrade in the company's stock rating by TD Cowen, from Buy to Hold, and a reduction in the price target by H.C. Wainwright, from $25 to $10. This reflects the market's pessimism about the company's near-term prospects and the potential delay in the launch of etripamil. The CRL has raised concerns about the company's limited capital, which could constrain its commercialization prospects.



To mitigate these effects, Milestone can employ several strategies. First, the company can work closely with the FDA to address the issues raised in the CRL and expedite the NDA resubmission process. The company has already indicated that it intends to request a Type A meeting to discuss the issues raised in the CRL, which is a positive step in this direction.

Second, the company can explore alternative funding sources to bolster its capital position. As of December 31, 2024, Milestone had $69.7 million in cash, cash equivalents, and short-term investments, which provides some financial cushion. However, the company may need to raise additional capital to support its operations and commercialization efforts.

Third, the company can focus on developing its other pipeline candidates and exploring new indications for etripamil. This could help diversify the company's revenue streams and reduce its reliance on a single product.

Finally, the company can engage with key opinion leaders and patient advocacy groups to build support for etripamil and raise awareness of its potential benefits. This could help generate demand for the product and create a favorable market environment for its launch.

In conclusion, the FDA's CRL for Milestone Pharmaceuticals' etripamil nasal spray has significant implications for the company's immediate and long-term financial outlook. However, by taking proactive steps to address the FDA's concerns and explore alternative funding sources, Milestone can mitigate these effects and position itself for future success. The biotech sector is a rollercoaster ride, and Milestone's journey is far from over.