On Tuesday, Morgan Stanley adjusted its outlook on Foghorn Therapeutics (NASDAQ:FHTX) by increasing the stock's price target to $9.00 from the previous $6.00. The firm has maintained an Equalweight rating on the shares of the biotechnology company.
The revision comes as Morgan Stanley updates its model for Foghorn Therapeutics in anticipation of a significant upcoming event. The company is expected to provide an update on the Phase I FHD-286 dose escalation for relapsed/refractory AML (acute myeloid leukemia) in the fourth quarter of 2024.
The forthcoming update is considered a pivotal moment that could validate Foghorn's strategy in chromatin biology. The analyst from Morgan Stanley noted the potential for a significant impact on the company's shares, suggesting a possible fluctuation ranging from a 25% to 50% change in stock value.
In other recent news, Foghorn Therapeutics recently Dr. Anna Rivkin as its new Chief Business Officer. Dr. Rivkin, with over 20 years of industry experience, joins from Bristol Myers (NYSE:BMY) Squibb and is anticipated to play a crucial role in Foghorn's business development, given her background in strategic alliances, research and development partnerships, and mergers and acquisitions.
In addition, Foghorn Therapeutics received positive coverage from investment firm Jefferies, which initiated coverage on the company with a Buy rating. This development comes as Foghorn continues to make progress in its drug development programs, particularly its FHD-909 and FHD-286 compounds. Both drugs are currently under clinical trials for non-small cell lung cancer and refractory/relapsed acute myeloid leukemia, respectively.
InvestingPro Insights
Following Morgan Stanley's revised outlook on Foghorn Therapeutics, a glance at InvestingPro data reveals a company with a market capitalization of $515.66 million and a notable revenue growth of 61.95% over the last twelve months as of Q2 2024. Despite this growth, InvestingPro data indicates that Foghorn suffers from negative gross profit margins and operating income margins, with figures standing at -211.75% and -269.91% respectively. These metrics underscore the challenges the company faces in achieving profitability.
InvestingPro Tips suggest a mixed financial health and performance picture for Foghorn. On the positive side, the company holds more cash than debt and has liquid assets that exceed short-term obligations, providing some financial stability. Additionally, two analysts have revised their earnings upwards for the upcoming period, reflecting a potential optimism in the company's future performance. However, the company is quickly burning through cash and analysts do not anticipate Foghorn will be profitable this year. The stock price has been quite volatile, with a strong return over the last three months of 75.19%, yet there is an anticipation of a sales decline in the current year.
Investors interested in Foghorn's stock may find these insights particularly relevant as they weigh the company's growth prospects against its current financial health. For a more detailed analysis, including additional InvestingPro Tips, visit https://www.investing.com/pro/FHTX.
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