Fulcrum clinical hold ‘gut punch for shares,’ says Oppenheimer

Oppenheimer analyst Matthew Biegler spoke to Fulcrum Therapeutics following news of the FTX-6058 clinical hold and learned that the hold was instituted after review of preclinical toxicity data that had been submitted as part of regular updates. Management clarified that no new data had been submitted since Fulcrum was awarded Fast Track designation in December, the analyst tells investors in a research note. This makes it sound like the hold wasn’t an "aha" moment but more of the agency taking an increasingly cautious stance on the drug’s mechanism of action, Opco contends. It calls the clinical hold a "gut punch for shares," which have rallied on investor enthusiasm for the program. The analyst thinks the issue can probably be resolved with added risk mitigation strategies, and says any resulting weakness in shares "could represent a buying opportunity." Opco has an Outperform rating on Fulcrum. The stock in morning trading is down 58% to $5.35.