Deutsche Bank has upgraded its recommendation for Avacta Group PLC (AIM:AVCT), the drug developer and diagnostics specialist, from "sell" to "hold" on valuation grounds.
Specifically, the change of stance comes after a 20% decline in Avacta's share price since Deutsche began its coverage, with the shares falling about 60% over the past year.
It cited concerns over Avacta's strategy, recent management changes, and mixed data on their lead drug candidate, AVA6000, as reasons for the previous downturn in sentiment.
AVA6000 is undergoing a new two-week dosing regimen, and the market is awaiting further data on its progress.
Deutsche is also looking for updates on Avacta's plan to sell its diagnostics business and any advancements in its partnerships and pipeline.
With Avacta's current share price aligning with the German bank's target of 40 pence, the recommendation was adjusted to "hold."
It will reassess Avacta's prospects after the interim results expected in September, which could provide clearer insights into the company's future trajectory.
In afternoon trading the shares were up 0.3p at 40.3p.