Foghorn Therapeutics initiated with a Buy at B. Riley

B. Riley initiated coverage of Foghorn Therapeutics (FHTX) with a Buy rating and $10 price target. The firm says its investment thesis centers on the company’s strategy to inactivate or degrade SMARCA2 in SMARCA-mutated cancers, “representing a potentially significant market opportunity” accounting for 5% of all solid tumors. The analyst views Foghorn’s lead asset, FHD-909, a selective SMARCA2 inhibitor currently in a Phase I dose-escalating study, as the primary value driver. Despite FHD-909’s key differentiated attributes and robust preclinical data, the Street is undervaluing the program due to disappointing early efficacy data from Prelude Therapeutics’ (PRLD) SMARCA2 degrader, the analyst tells investors in a research note. Riley says the pullback has created an attractive entry point to buy Foghorn shares.