RBC says 4D Molecular ‘oversold’ after ‘right decision’ about Phase 3 pivot

RBC Capital notes that 4D Molecular shares are down 15% intraday following wAMD data and pivotal trial updates and thinks the negative stock reaction is being driven by management’s decision to pivot the Phase 3 enrollment away from a broad disease patient population to a treatment-naive population, which could take longer to enroll. While the firm does not disagree that adding a more stringent inclusion criteria would limit the number of patients eligible for the study, it thinks that enrolling treatment-naive is “the right strategic decision and FDMT will be able to execute,” the analyst tells investors. The firm, which believes 4D-150 continues to show “a compelling efficacy profile,” thinks the stock is “oversold” and would be buyers ahead of additional near-term catalysts, reiterating an Outperform rating and $40 price target.