Navigating the Shockwaves: BMO Capital Markets Downgrades Jasper Therapeutics to Market Perform

Jasper Therapeutics (JSPR), a clinical-stage biotechnology innovator focused on novel antibody therapies for chronic inflammatory and immunological conditions, has landed squarely in the analyst spotlight following a sharp and highly publicized drop in its stock price. BMO Capital Markets, a widely respected institutional research firm with deep expertise in the healthcare and biotech sectors, has issued a notable downgrade: shifting its rating from Outperform to Market Perform, with a new price target of $4. This move, triggered in the wake of recent operational and clinical turbulence, is forcing investors to reassess both the short-term risk and longer-term opportunity embedded in Jasper’s unique pipeline.

With life sciences stocks often swinging on binary clinical outcomes, analyst upgrades and downgrades serve as early signals for institutional positioning and can foreshadow deeper liquidity shifts. In Jasper’s case, today’s downgrade carries added weight, given the confluence of clinical trial updates, manufacturing challenges, and dramatic stock volatility over the past week.

Key Takeaways:

• BMO Capital Markets has downgraded Jasper Therapeutics from Outperform to Market Perform, setting a new price target of $4.

• At the current price of $3.05, the price target implies a potential upside of 31% despite the downgrade.

• Shares plunged nearly 55% on July 7th following news of a problematic drug lot for lead candidate briquilimab, driving volume to record highs.

• Recent clinical data from urticaria studies were positive for lower-dose cohorts but confounded by manufacturing issues in others, resulting in a halted asthma trial.

• Jasper’s Relative Strength Index (RSI) is under 30, suggesting the stock may be technically oversold, but persistent volatility and execution risks remain.

Analyst Downgrade & Firm Profile: Interpreting BMO’s Move

BMO Capital Markets, one of North America’s largest and most influential sell-side research institutions, has a long track record of healthcare coverage and deep relationships with institutional funds active in the biotech space. Their shift from Outperform to Market Perform is not a casual call—especially for a company as early-stage and data-dependent as Jasper Therapeutics. The $4 target, while below prior expectations (previous target not disclosed), still sits comfortably above current trading levels, suggesting that BMO sees stabilization and potential recovery if execution improves.

BMO’s caution likely stems from two factors: the recent operational hiccup with briquilimab drug lots, and the market’s sharply negative response. While BMO’s downgrade may dampen near-term sentiment, their continued price target above market signals belief in underlying science and market opportunity.

Analyst Confidence in Context (9 words):

Respected healthcare specialist, cautious but not bearish, signals watchful optimism.

Stock Performance: Anatomy of a Collapse and Technical Readings

Jasper Therapeutics’ share price has been a case study in volatility. After an extended period of drifting lower (one-year VWAP: $10.28; 20-day EMA: $5.24), the stock collapsed to a 52-week low of $2.27 on July 7th, coinciding with the company’s disclosure of a problematic drug lot. Volume exploded to over 13 million shares—more than 35x the average—reflecting forced liquidations and loss of confidence.

Table: Key Price and Volume Events (Past Year)

Technical momentum indicators are now flashing extremes: Jasper’s RSI is under 30, a classic oversold threshold, and both the 20-day EMA and SMA are well above current levels. Such technical setups can sometimes precede sharp bounces, especially if negative news gets digested and value buyers step in. However, average daily volatility above 1% and the sentiment ratio skewed negative (more down days than up) highlight ongoing fragility.

Clinical and Operational News: Parsing the Headlines

July 7th marked a perfect storm:

• Benzinga: "Jasper Therapeutics, Inc. JSPR stock is experiencing a steep decline on Monday, plummeting by nearly 55%. This significant drop is accompanied by an exceptionally high trading volume of 9.9 million shares, vastly exceeding its average daily volume of 251.9K."
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• GlobeNewswire: Clinical data updates revealed that while the 180mg briquilimab cohort in urticaria showed strong response rates (92% achieved complete response), higher doses and other cohorts were confounded by the defective drug lot, leading to the halt of the ETESIAN asthma study. No serious adverse events were noted, and the company is actively communicating remediation steps.
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"Results from the 240mg Q8W and the 240mg followed by 180mg Q8W cohorts appear to be confounded by issues with one drug product lot… ETESIAN study in asthma to be stopped due to same drug product lot issue."
— GlobeNewswire, July 7, 2025

This sequence of news has moved Jasper from a promising clinical momentum story to a cautionary tale about manufacturing risk in biotech—an ever-present but often underappreciated threat.

Financial Health: Cash, Burn, and Forward Visibility

While Jasper’s recent news cycle has been dominated by clinical and operational events, financial stability is paramount for any early-stage biotech. The company’s financials (not fully detailed in the provided data, but historically characterized by moderate cash reserves and a negative earnings profile) will be under renewed scrutiny. Investors should watch closely for near-term updates on cash runway, burn rates, and any potential for dilutive capital raises—which can quickly erode any upside implied by analyst targets.

Potential Upside: Calculating Opportunity Post-Downgrade

Despite the downgrade, BMO’s new $4 target price represents a potential upside of 31% from the current $3.05 level. For risk-tolerant investors, this suggests that BMO sees Jasper as having room to recover if management can resolve manufacturing issues and restore clinical momentum. However, with a technical setup this oversold and sentiment this negative, any recovery is likely to be jagged and event-driven.

Table: Price Target vs. Market Price

What’s Next? Key Watchpoints for Investors

• Operational Fixes: Fast, transparent remediation of the drug lot issue is essential.

• Clinical Data: Clean updates from ongoing urticaria studies could rapidly restore confidence.

• Funding: Any signals of near-term capital raises or partnerships could alter sentiment.

• Analyst Consensus: Watch for other firms following BMO’s lead—or diverging with more bullish or bearish calls.

Conclusion: Downgrade as a Reset, Not a Death Knell

BMO’s downgrade of Jasper Therapeutics is a high-profile warning shot—but not an obituary. The fact that their price target remains above market suggests an expectation that Jasper may stabilize and recover, provided it executes operational fixes and continues to deliver compelling clinical data. This presents a tricky but potentially rewarding setup: the risk of further downside if execution falters, offset by the possibility of a technical and fundamental rebound from deeply oversold levels.

The coming weeks will be critical for Jasper—and for investors looking to separate signal from noise in one of biotech’s most closely watched turnaround stories of the summer.