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Fulcrum Stock Tanks 58% in a Month: Buying Opportunity or Risky Bet?
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Shares of Fulcrum Therapeutics (FULC - Free Report) , a clinical-stage company, have plummeted 58% in the past month compared with the industry’s 2.7% decline. FULC has also underperformed in the sector and the S&P 500 in the past month, as seen in the chart below.
FULC Stock Underperforms the Industry, Sector & the S&P 500
Image Source: Zacks Investment Research
The dip in the stock price was primarily observed after the company faced a major setback in September when it announced disappointing top-line data from a late-stage study, which evaluated its pipeline candidate, losmapimod, for facioscapulohumeral muscular dystrophy (FSHD), a rare and debilitating disease. Currently, there are no treatments approved for the given indication.
Per the data readout, the phase III REACH study for FSHD did not meet its primary endpoint as treatment with losmapimod failed to demonstrate a change from baseline in relative surface area, a measure of reachable workspace, compared with placebo at week 48. The study also failed to achieve nominal statistical significance on the secondary endpoints. Following the disappointing data observed in the REACH study, Fulcrum decided to stop the further development of losmapimod in FSHD.
However, this is not the end of the world for the company as its clinical-stage pipeline has another promising candidate, which is likely to be the reason for FULC’s turnaround. Let’s dig deeper into the factors governing the company’s prospects to understand how to play the stock after the recent price drop.
FULC’s SCD Program Has Significant Potential
Having scraped the FSHD program, Fulcrum has shifted its focus to pociredir, which is currently being developed in an early-stage study for treating patients with sickle cell disease (SCD), an inherited blood disorder.
Pocirediris is an investigational oral small-molecule inhibitor of embryonic ectoderm development (EED). It was developed using Fulcrum’s proprietary drug discovery technology, FulcrumSeek. FULC is currently evaluating four once-daily dosage strengths of pociredir (2 mg, 6 mg, 12 mg and 20 mg) in separate cohorts in a phase Ib study to treat SCD. Each cohort is expected to enroll approximately 10 patients. Top-line data from this study is expected in 2025.
Early data in SCD showed that pociredir successfully demonstrated proof-of-concept by achieving increases in HbF levels, indicating potential patient benefits. Prior to the clinical hold on the phase Ib study, which was in place from February to August 2023, it was observed that the candidate was generally well-tolerated in individuals with SCD, with up to three months of use and no serious treatment-related adverse events reported.
Pocirediris already enjoys the Fast Track designation and Orphan Drug designation in the United States for the treatment of SCD patients. SCD has a significant unmet medical need, and if successfully developed and upon potential approval, pociredir has the potential to boost FULC’s prospects in the days ahead.
Vertex (VRTX - Free Report) and CRISPR Therapeutics (CRSP - Free Report) market their one-time gene therapy for SCD and transfusion-dependent beta thalassemia, Casgevy(exa-cel). Notably, Casgevy was approved in multiple geographies in 2023 and early 2024, including the United States and the EU. bluebird bio (BLUE - Free Report) also markets its own SCD therapy under the brand name, Lyfgenia (lovo-cel). BLUE’s Lyfgenia has a different mechanism of action than that of VRTX/CRSP’s Casgevy. Several other biotech firms are also currently developing SCD treatments.
From a valuation standpoint, Fulcrum appears attractive relative to the industry and is trading below its 5-year mean. Going by the price/book value ratio, the company shares currently trade at 0.81 trailing 12-month book value, lower than 3.89 for the industry and the stock’s 5-year mean of 2.25.
FULC Stock Valuation
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for Fulcrum’s loss per share has narrowed from 46 cents to 28 cents for 2024 over the past 60 days, while that for 2025 has narrowed from a loss per share of $1.51 to $1.14.
FULC Estimate Movement
Image Source: Zacks Investment Research
Consider Buying FULC Stock
The unsuccessful FSHD study on losmapimod has left Fulcrum’s clinical pipeline without a late-stage candidate and considerably delayed its revenue prospects. However, investors should note that the company has another developmental candidate, pociredir, in its pipeline. While still in the early stages of development, Fulcrum’s pociredir program for treating SCD shows promise and has the potential to drive company growth sooner than anticipated.
The SCD market offers strong growth potential due to regulatory incentives and heightened public awareness. Fulcrum’s pociredir has already demonstrated promising efficacy and safety trends in SCD patients. If the upcoming phase Ib study for pociredir yields positive top-line results in 2025, the stock could see significant gains. Consistently improving loss estimates highlight analysts’ optimistic outlook for sustained growth in the future.
Given these factors, investors are encouraged to look beyond the recent pipeline setback and consider adding this Zacks Rank #2 (Buy) stock to their portfolio, particularly keeping in mind the significant potential of pociredir for SCD. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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Fulcrum Stock Tanks 58% in a Month: Buying Opportunity or Risky Bet?
Shares of Fulcrum Therapeutics (FULC - Free Report) , a clinical-stage company, have plummeted 58% in the past month compared with the industry’s 2.7% decline. FULC has also underperformed in the sector and the S&P 500 in the past month, as seen in the chart below.
FULC Stock Underperforms the Industry, Sector & the S&P 500
The dip in the stock price was primarily observed after the company faced a major setback in September when it announced disappointing top-line data from a late-stage study, which evaluated its pipeline candidate, losmapimod, for facioscapulohumeral muscular dystrophy (FSHD), a rare and debilitating disease. Currently, there are no treatments approved for the given indication.
Per the data readout, the phase III REACH study for FSHD did not meet its primary endpoint as treatment with losmapimod failed to demonstrate a change from baseline in relative surface area, a measure of reachable workspace, compared with placebo at week 48. The study also failed to achieve nominal statistical significance on the secondary endpoints. Following the disappointing data observed in the REACH study, Fulcrum decided to stop the further development of losmapimod in FSHD.
However, this is not the end of the world for the company as its clinical-stage pipeline has another promising candidate, which is likely to be the reason for FULC’s turnaround. Let’s dig deeper into the factors governing the company’s prospects to understand how to play the stock after the recent price drop.
FULC’s SCD Program Has Significant Potential
Having scraped the FSHD program, Fulcrum has shifted its focus to pociredir, which is currently being developed in an early-stage study for treating patients with sickle cell disease (SCD), an inherited blood disorder.
Pocirediris is an investigational oral small-molecule inhibitor of embryonic ectoderm development (EED). It was developed using Fulcrum’s proprietary drug discovery technology, FulcrumSeek. FULC is currently evaluating four once-daily dosage strengths of pociredir (2 mg, 6 mg, 12 mg and 20 mg) in separate cohorts in a phase Ib study to treat SCD. Each cohort is expected to enroll approximately 10 patients. Top-line data from this study is expected in 2025.
Early data in SCD showed that pociredir successfully demonstrated proof-of-concept by achieving increases in HbF levels, indicating potential patient benefits. Prior to the clinical hold on the phase Ib study, which was in place from February to August 2023, it was observed that the candidate was generally well-tolerated in individuals with SCD, with up to three months of use and no serious treatment-related adverse events reported.
Pocirediris already enjoys the Fast Track designation and Orphan Drug designation in the United States for the treatment of SCD patients. SCD has a significant unmet medical need, and if successfully developed and upon potential approval, pociredir has the potential to boost FULC’s prospects in the days ahead.
Vertex (VRTX - Free Report) and CRISPR Therapeutics (CRSP - Free Report) market their one-time gene therapy for SCD and transfusion-dependent beta thalassemia, Casgevy(exa-cel). Notably, Casgevy was approved in multiple geographies in 2023 and early 2024, including the United States and the EU. bluebird bio (BLUE - Free Report) also markets its own SCD therapy under the brand name, Lyfgenia (lovo-cel). BLUE’s Lyfgenia has a different mechanism of action than that of VRTX/CRSP’s Casgevy. Several other biotech firms are also currently developing SCD treatments.
FULC’s Attractive Valuation, Improving Earnings Estimates
From a valuation standpoint, Fulcrum appears attractive relative to the industry and is trading below its 5-year mean. Going by the price/book value ratio, the company shares currently trade at 0.81 trailing 12-month book value, lower than 3.89 for the industry and the stock’s 5-year mean of 2.25.
FULC Stock Valuation
The Zacks Consensus Estimate for Fulcrum’s loss per share has narrowed from 46 cents to 28 cents for 2024 over the past 60 days, while that for 2025 has narrowed from a loss per share of $1.51 to $1.14.
FULC Estimate Movement
Consider Buying FULC Stock
The unsuccessful FSHD study on losmapimod has left Fulcrum’s clinical pipeline without a late-stage candidate and considerably delayed its revenue prospects. However, investors should note that the company has another developmental candidate, pociredir, in its pipeline. While still in the early stages of development, Fulcrum’s pociredir program for treating SCD shows promise and has the potential to drive company growth sooner than anticipated.
The SCD market offers strong growth potential due to regulatory incentives and heightened public awareness. Fulcrum’s pociredir has already demonstrated promising efficacy and safety trends in SCD patients. If the upcoming phase Ib study for pociredir yields positive top-line results in 2025, the stock could see significant gains. Consistently improving loss estimates highlight analysts’ optimistic outlook for sustained growth in the future.
Given these factors, investors are encouraged to look beyond the recent pipeline setback and consider adding this Zacks Rank #2 (Buy) stock to their portfolio, particularly keeping in mind the significant potential of pociredir for SCD. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.