BofA Securities Upgrades Fulcrum Therapeutics (FULC) to Neutral

BofA Securities analyst Tazeen Ahmad upgraded Fulcrum Therapeutics (NASDAQ: FULC) from Underperform to Neutral with a price target of $10.00 (from $5.00).

The analyst comments "We are raising our rating for Fulcrum Therapeutics (FULC) shares to Neutral ahead of the company’s ph 3 losmapimod readout (expected by end of October) to treat facioscapulohumeral muscular dystrophy (FSHD). We remind investors that FSHD is a rare muscular dystrophy primarily affecting upper extremity mobility that has no approved therapies. Although a previous pivotal study had failed using a different endpoint (DUX4 expression), the company did a post-hoc analysis and re-designed a new study with an endpoint called reachable workspace (RWS). We took a closer look at this endpoint which has been a topic of debate in the investment community. We also spoke with two KOLs to get their views. Both highlighted excitement for the ph 3 readout given the functional benefit demonstrated in the ph 2 study as measured by RWS (measures upper extremity). Our KOLs commented that despite being a newer endpoint, it accurately measures disease progression. On ph 3 expectations, both docs view stabilization of RWS as clinically meaningful and note simply replicating the ph 2 results would be a win (10% pbo-adjusted ∆ at 48-wks). If we assume that the current study’s population closely mirrors those enrolled in the previous study the likelihood of the study working should be higher than the 35% we have been modeling. However, we still struggle to conclude that the study is more likely to work than not given the always unpredictability of how the control arm could respond. With these observations in mind, we now move to a 50% LOS. Losmapimod now contributes $9/sh to our new $10 PO (see model changes inside). We await the ph 3 readout before further de-risking the program and note we continue to view the pociredir story in sickle cell disease (SCD) as a stock overhang."

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 $8.54 yesterday.

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