Shares of biopharma Fulcrum Therapeutics (NASDAQ:FULC) have climbed over 125% in the past year in anticipation of the successful conclusion of Phase 3 trials on its lead pipeline candidate. The drug targets an unmet need and shows $1 billion per year blockbuster potential. Investors interested in a clinical-stage biopharma stock close to commercializing its products might find this opportunity compelling.
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Fulcrum Readies a Phase 3 Candidate For Market
Fulcrum Therapeutics is a clinical-stage biopharmaceutical company focused on genetically defined rare diseases in untapped areas of medical need. Fulcrum’s two leading programs in clinical development are Losmapimod, a small molecule for the treatment of facioscapulohumeral muscular dystrophy (FSHD), and Pociredir, a small molecule designed to increase the expression of fetal hemoglobin for the treatment of sickle cell disease and other hemoglobinopathies, including beta-thalassemia.
Its lead candidate, Losmapimod, is a selective p38α/β mitogen-activated protein kinase inhibitor. It is a potentially transformative treatment for FSHD, a rare and debilitating disease for which no approved treatments exist. The FDA has since granted Losmapimod Fast Track designation and Orphan Drug Designation for treating this condition. It is undergoing a Phase 3 study, and Fulcrum expects to report topline data in the fourth quarter of 2024.
Fulcrum anticipates that Losmapimod will be ready for market by 2026 and has engaged in a collaboration and license agreement with Sanofi (NASDAQ:SNY) to develop and commercialize the drug. Sanofi will have the exclusive rights to commercialize it outside the U.S. At the same time, Fulcrum will receive an initial payment of $80 million, possibly earning up to $975 million more based on regulatory and sales milestones.
Fulcrum’s Financial Position & Outlook
Fulcrum has recently reported Q1 financials. The company’s expenses for Q1 2024 were $19.8 million, marking a surge from the $16.7 million spent in Q1 2023. This considerable rise of $3.1 million is predominantly due to the increased costs associated with the advancement of their Phase 3 trials. This resulted in a net loss of $26.9 million, a noticeable increase from $24.8 million in Q1 2023. However, GAAP EPS of -$0.43 was in line with expectations.
Fulcrum’s cash equivalents and marketable securities stood at $213.3 million at the end of March 2024, a decrease from the $236.2 million recorded at the end of the previous year. This decline can be attributed to the net cash used in operational activities during the quarter. However, the company expects the recent milestone of $80.0 million due from the collaboration and license agreement with Sanofi to ensure that their current operating plans are sufficiently funded until 2027.
Is FULC Stock a Buy?
Analysts following the company’s progress have mostly been bullish on their outlook for the stock. Cantor Fitzgerald analyst Kristen Kluska, a five-star analyst according to Tipranks’ rating system, recently initiated coverage with an Overweight rating and a $23 price target. She noted expectations for a successful Phase 3 endpoint and a market opportunity that could translate to peak sales of $1.1B.
Fulcrum Therapeutics is rated a Strong Buy based on nine Wall Street analysts’ recommendations and price targets over the past three months. The average price target for FULC stock is $17.00, representing an upside of 120.49% from current levels.
The stock has been trending up, climbing over 6% in the past month. It trades in the middle of its 52-week price range of $2.65-$13.70, though it currently shows mixed momentum results, trading above its 20-day (7.68) but below its 50-day (8.01) moving averages.
Final Thoughts on Fulcrum
Fulcrum Therapeutics is nearing the culmination of a crucial Phase 3 trial on its lead pipeline candidate, with expectations to go to market by 2026. The drug targets a high-need area and could generate $1 billion annually, making the stock a captivating prospect for investors seeking a near-commercialization clinical-stage biopharma opportunity.
