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On Thursday, RBC Capital Markets adjusted its price target on shares of Edgewise Therapeutics (NASDAQ:EWTX), bringing it down to $52.00 from the previous $56.00, while maintaining an Outperform rating on the stock. The revision followed Edgewise Therapeutics’ announcement of their 28-day CIRRUS Part B/C data. The stock, currently trading at $13.98 with a market capitalization of $1.32 billion, has experienced significant pressure, falling nearly 34% in the past week according to InvestingPro data.
Leonid Timashev of RBC Capital Markets provided insights, stating that despite the stock’s significant sell-off, which seemed to indicate investor skepticism towards the company’s ’7500 program, the opportunity for buying arises. He noted that the drug demonstrated "compelling and highly meaningful efficacy," and the associated risk of atrial fibrillation (afib) is both manageable and likely not connected to ’7500. InvestingPro data shows the company maintains a strong financial position with more cash than debt and a healthy current ratio of 19.93, suggesting ample liquidity to fund its development programs.
Timashev emphasized the potential of Edgewise Therapeutics’ pipeline, including the sevasemten program for muscular dystrophy, which is expected to show more data in the first half of 2025. He also pointed out the ’7500 program, with additional data anticipated in the second half of 2025, suggesting these could validate the programs’ success and contribute to a combined revenue opportunity exceeding $5 billion.
The analyst’s commentary reflected a positive outlook on Edgewise Therapeutics’ drug development programs. He recommended investors consider the current downward movement in stock price as an opportunity to invest, given the upcoming data catalysts that could underscore the value of the company’s drug candidates.
RBC Capital’s revised target price is based on updates to their financial model, which takes into account the latest data and market responses. The firm’s outlook remains optimistic about Edgewise Therapeutics’ prospects in the biopharmaceutical industry. InvestingPro analysis suggests the stock is currently undervalued, with analyst targets ranging from $30 to $52. For deeper insights into Edgewise Therapeutics’ valuation and growth potential, investors can access the comprehensive Pro Research Report, available exclusively to InvestingPro subscribers, along with 12 additional ProTips for this stock.
In other recent news, Edgewise Therapeutics has been in the spotlight following the release of top-line results from its Phase 2 trial of EDG-7500 for hypertrophic cardiomyopathy (HCM). The trial showed promising reductions in left ventricular outflow tract gradient and improvements in patient-reported outcomes, but safety concerns arose due to two serious cases of atrial fibrillation. Despite these concerns, Truist Securities maintained a Buy rating and a $50 price target, emphasizing the drug’s potential efficacy without increased risk of left ventricular ejection fraction complications. Additionally, Edgewise announced a $200 million underwritten stock offering, pricing shares at $20.13 each, to fund future trials and potential product launches.
Meanwhile, Cytokinetics (NASDAQ:CYTK) is benefiting from these developments, with Morgan Stanley (NYSE:MS) reaffirming its Overweight rating and $67 price target. Analysts noted the safety profile of Cytokinetics’ aficamten, which showed no significant atrial fibrillation incidence compared to placebo, as a key differentiator. RBC analyst Leonid Timashev acknowledged Edgewise’s strong efficacy data but highlighted potential concerns aligning with cardiac myosin inhibitors, suggesting Cytokinetics may leverage a more convenient profile for market advantage. These analyses have positively influenced investor sentiment toward Cytokinetics, underscoring the competitive dynamics in the biopharmaceutical sector.
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