Jefferies Reconsiders, BMEA Plummets after Sour Diabetes Drug Data

For any investor, it’s a dark day when the stock you’ve invested in loses 20% of its value. That was exactly the day that biotech stock Biomea Fusion (NASDAQ:BMEA) had. At least, it did once Jefferies analysts got a hold of it, pivoted on their rating, and sent Biomea Fusion on a rocket sled to the bargain basement.

Biomea Fusion brought its new diabetes treatment, BMF-219, to the American Diabetes Association for a presentation detailing some of its latest data. Jefferies analysts took in that presentation and promptly noted that the presentation offered more questions than answers, and noted: “It may take a while to see a clear development path and successful commercial application (of) BMF-219.” That’s a pretty sour assessment and was enough for Jefferies to not only lower Biomea from Buy to Hold but also to lower the price target from $36 down to $28.

In what was perhaps the unkindest cut of all, Biomea Fusion began its trading day up in the double-digit range after clinical data emerged for BMF-219. The clinical data offered some impressive new results, including how 70% of one of the cohorts—Cohort 3, specifically—saw improvement during continuous monitoring, and 50% showed continuous improvement even three months after going off the treatment. Even biomarker data offered some welcome news, as levels of C-peptide were not only increased during treatment but maintained even after going off treatment. However, a toxicity signal from one of the testing cohorts made Biomea reconsider dosing levels.

However, even as Jefferies pulls back, the rest of the analyst consensus remains strong on Biomea Fusion stock’s side. Analyst consensus calls the stock a Strong Buy with seven Buy ratings and one Hold. Meanwhile, Biomea Fusion stock also offers investors a 106.35% upside potential thanks to its average price target of $50.38.

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