Fed’s Powell opens door to potential rate cuts at Jackson Hole
On Monday, BMO Capital Markets issued a downgrade for 4D Molecular Therapeutics (NASDAQ:FDMT) from Outperform to Market Perform, setting a price target of $15.00. The stock, currently trading at $5.52, has fallen nearly 71% over the past year and is trading close to its 52-week low of $5.22.
The decision came after the firm raised concerns over the potential market reach and durability of 4D-150, the company's leading drug candidate for eye diseases.According to InvestingPro analysis, FDMT appears undervalued based on its Fair Value metrics, though investors should note the company's weak financial health score of 1.55 out of 5.
Analysts at BMO Capital highlighted that the effectiveness of 4D-150 appears to be limited for patients who are not newly diagnosed. This is based on clinical data indicating that only 56% of severe DME patients remained injection-free at 32 weeks and 37% of wAMD patients at 52 weeks.
Consequently, they estimate that the drug would be applicable to approximately 10-20% of the total wAMD patient population, where 4D-150 shows longer durability. The company's financial position shows it's quickly burning through cash, with negative free cash flow of $116.76 million in the last twelve months.
The firm also pointed to the lack of significant catalysts expected in the next 12 months or more for 4D Molecular Therapeutics. They expressed concern that future data readouts could further dampen the outlook for 4D-150, as longer follow-ups might reveal a decrease in the injection-free rate. Additionally, safety concerns always pose a risk in such trials.
BMO Capital also noted the increasingly competitive landscape for treatments in this area, with Regeneron Pharmaceuticals (NASDAQ:REGN) recently acquiring Oxular and the presence of tyrosine kinase inhibitors (TKIs) in the market.
While acknowledging 4D-150's potential to reduce treatment burden, they cited real-world evidence from other indications with multiple treatment options, such as Hemophilia, which suggests limited uptake for gene therapies that do not offer long-term durability.For detailed analysis and 16 additional ProTips on FDMT, including comprehensive financial metrics and peer comparisons, visit InvestingPro to access the full Pro Research Report.
In other recent news, 4D Molecular Therapeutics has prioritized two product candidates, 4D-150 and 4D-710, in a strategic refocusing of its development pipeline. The Phase 3 4FRONT trials for 4D-150, aimed at treating wet age-related macular degeneration and diabetic macular edema, are set to commence in 2025. The company's pulmonology program, 4D-710, has completed Phase 1 enrollment and is focusing on the treatment of cystic fibrosis.
As a result of this refocusing, 4D Molecular Therapeutics has extended its cash runway, with funds expected to support operations into 2028. The company has also issued a pre-funded warrant to RA Capital Healthcare Fund, involving the exchange of 535,000 shares of common stock for a warrant to acquire an equivalent number of shares.
Investment firms including Morgan Stanley (NYSE:MS), BMO Capital Markets, Chardan Capital Markets, H.C. Wainwright, and Goldman Sachs have provided assessments of the company's progress. While Morgan Stanley initiated coverage with an Underweight rating, the other firms maintained positive stances with Outperform and Buy ratings.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.