On Monday, RBC Capital maintained its optimistic stance on 4D Molecular Therapeutics (NASDAQ:FDMT), reiterating an Outperform rating with a steady price target of $40.00.
This affirmation comes despite a recent decline in the company's share price, which dropped by approximately 50% following the readout of a clinical trial for its wet age-related macular degeneration (wAMD) treatment last Wednesday.
The trial results sparked a mix of reactions among investors, with a focus on the efficacy, safety, and the implications of trial design modifications. RBC Capital delved into these concerns and concluded with a reinforced confidence in the company's trajectory as it advances towards a pivotal trial.
The analyst highlighted that the extra injection included in the treatment is unlikely to be the sole factor in the observed efficacy at 24 weeks. Additionally, the intraocular inflammation (IOI) profile is consistent with the standard of care, and 4D Molecular Therapeutics has the highest number of patients treated with the selected regimen entering a pivotal phase.
The analyst also pointed out that the current market valuation of 4D Molecular Therapeutics, with an enterprise value of $155 million, seems to disregard the potential of the ocular program. This assessment overlooks the two significant data readouts anticipated this year and the planned initiation of a Phase III trial in the first quarter of 2025.
The upcoming data readout for diabetic macular edema (DME) expected in the fourth quarter and the 52-week readout for the severe/population extension wAMD in February 2025 are seen as potential catalysts for the 4D-150 profile to strengthen and for the company's stock to respond positively. The analyst reiterated the Outperform rating and highlighted the speculative risk associated with the stock.
In other recent news, 4D Molecular Therapeutics has reported encouraging interim results from its Phase 2 clinical trial of 4D-150, a gene therapy product for wet age-related macular degeneration.
The treatment demonstrated a significant reduction in the need for anti-VEGF injections, the current standard of care for this condition. Furthermore, patients in the planned Phase 3 dose arm showed an 89% reduction in the mean annualized injection rate, with 77% remaining injection-free.
RBC Capital Markets has reiterated its Outperform rating on the biotechnology company, highlighting the potential for improved outcomes in the wet Age-related Macular Degeneration population and a discernible treatment effect for Cystic Fibrosis.
BMO Capital Markets Corp. has maintained an "Outperform" rating, despite lowering its price target for 4D Molecular Therapeutics due to the FDA's requirement for a Phase III randomized trial for the company's cystic fibrosis therapy. Barclays Capital Inc. initiated coverage on the company with an "Overweight" rating, expressing confidence in the wetAMD program and its product candidate 4D-150.
These developments come as the company continues to make progress in its clinical trials, with approximately $600 million in cash and equivalents as of Q4 2023, positioning the company to sustain its R&D efforts into the first half of 2027.
The company is working with regulatory agencies in the U.S. and Europe to finalize the design of its Phase 3 clinical trial for 4D-150, with an expected announcement in September 2024 and trial commencement in the first quarter of 2025. Further results from the ongoing trials for both wet AMD (NASDAQ:AMD) and diabetic macular edema are anticipated in the coming months.
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