Credit Suisse Downgrades Fulcrum Therapeutics (FULC) to Neutral

(Updated - March 9, 2023 4:07 PM EST)

Credit Suisse analyst Judah Frommer downgraded Fulcrum Therapeutics (NASDAQ: FULC) from Outperformer to Neutral with a price target of $8.00 (from $11.00).

The analyst comments "Fulcrum with its 4Q22 earnings release provided incremental updates regarding the full clinical hold recently placed on the Ph1b trial of FTX-6058 (SCD) with the key clarification, in our view, being FDA’s clear focus on risk-benefit within the broader SCD patient population. We see this line of questioning as likely further limiting the addressable population for ‘6058 to more severe (perhaps above an annualized VOC threshold) patients and bring down our peak sales assumption accordingly. Communication remains an issue for investors, as does mgmt. turnover, with clarity around what generated the hold (is it a class/target safety issue or specific to chronic tox data FULC submitted last year) and timeline to resolution (at least 4-6 months) representing overhangs for the stock near term. As we have discussed previously, we saw risk of hematologic malignancies as informed by PRC2 inhibition in oncology assets (see Tazverik label) as a known area of consternation for investors but it has now moved to the forefront of the FULC narrative. With ~$5/share in cash and 2 clinical stage programs that – even at reduced PoS – generate ~$3-4 (incl. corp. cost allocation) in combined DCF value, we can see risk/reward in shares as being positive over time, but take our rating to Neutral (from Outperform) and our TP to $8 until clarity around resolution of the ‘6058 clinical hold is in sight."

For an analyst ratings summary and ratings history on Fulcrum Therapeutics click here. For more ratings news on Fulcrum Therapeutics click here.

Shares of Fulcrum Therapeutics closed at $6.26 yesterday.

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