Biotech stock 4D Molecular Therapeutics (NASDAQ:FDMT) saw its share price collapse in Thursday afternoon’s trading, and the reason is a common one for any major swing—in any direction—of a biotech stock. It’s all about the latest drug testing results, and in this case, they weren’t welcome results.
The drug in question, known as 4D-150, focused on treating wet age-related macular degeneration, a common eye condition for the elderly. The data from interim phase 1 / 2 focused on a three-dose test and produced some worthwhile results. There was an improvement—or at least a stabilizing—of retinal edema, and visual acuity remained stable overall. There were no issues of toxicity that might limit doses, and there were no adverse events reported relating to the treatment.
So then, why the plunge? Mani Foroohar of SVB Securities noted the biggest problem with this drug was that it suffered from extreme expectations and debates on details of what is still a small number of patients involved in the study. 4D itself quoted one of the investigators in the clinical trial who noted, “I continue to be encouraged by the tolerability and clinical activity of a single intravitreal injection of 4D-150 in high-need patients with wet AMD.”
Turning to Wall Street, analysts are enthusiastic about 4D Molecular Therapeutics stock as well. Analyst consensus calls it a Strong Buy with three Buy ratings and one Hold. Further, 4D Molecular Therapeutics offers up a dizzying 97.45% upside potential thanks to its average price target of $31.75.