Fulcrum Therapeutics Inc.’s (NASDAQ: FULC), stock fell 65% after the company announced that its trial of losmapimod for facioscapulohumeral muscle dystrophy failed to reach its primary goal.
The biotech firm has halted further drug development for FSHD due to this significant setback, causing their stock price to plummet.
Phase 3 trials, with 260 participants over 48-weeks, failed not only to reach their primary endpoint but also statistical significance for secondary ones.
Fulcrum Therapeutics, a company that specializes in rare genetic disorders, has discontinued its losmapimod treatment program. FSHD is a condition that results in muscle weakness of the arms, shoulders and face.
Currently there are no treatments approved for FSHD. It affects approximately 4 out of every 100,000 individuals.
Fulcrum Therapeutics shares are down 75% since their March high.
As the company attempts to recover from its major clinical failure, it faces many challenges.
Fulcrum Therapeutics: What is next?
Fulcrum Therapeutics will shift its attention to other therapeutic fields despite this setback.
According to a Thursday press release, the company plans to use $274 million of cash, cash-equivalents and marketable securities in order to develop new treatments for Diamond-Blackfan Anemia and to advance pociredir to treat sickle cell diseases.
Alex Sapir, CEO of REACH Pharmaceuticals, expressed his disappointment at the REACH failure but reiterated that the company is committed to finding other therapeutic alternatives.
It is no surprise that the trial failed. The firm’s stock has been steadily declining in recent months due, among other things, to its absence of dividend yield to appeal to income-oriented investors.
Wall Street is bullish about FULC’s future after today’s report
Wall Street maintained an optimistic outlook on Fulcrum Therapeutics before the results of the clinical trial were announced.
Bank of America Securities analysts recently upgraded the shares to “neutral” and raised their price targets to $10, anticipating a successful outcome of the FSHD trials.
They also warned that clinical trials can be unpredictable.
RBC’s analysts were more optimistic, setting the price at $15, representing a 100% potential upside.
It remains to be determined how the firms’ outlook will change after receiving these trial results.
Fulcrum announced second quarter earnings in August that were above Wall Street’s expectations. The company reported a net profit of $55.4m, up from $23.8m in loss in 2022.
Over the next three-year period, it was projected that revenue would grow by 35% annually.
Fulcrum’s guidance will need to be revised following the failure of REACH.
Fulcrum Therapeutics’ future depends on the ability of its pipeline to progress in other areas. Investors are waiting for further developments after this major clinical failure.
The post Fulcrum Therapeutics stocks tank after phase 3 trial failure for muscular dystrophy drugs may be updated as new developments unfold.
