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Foghorn Therapeutics stock was catering after the biotech company said U.S. regulators placed a partial clinical hold on a cancer study after a patient’s death. But analysts are still optimistic on the stock.
Foghorn stock (ticker: FHTX) has nosedived 21%, to $9.04, in recent trading. If it holds, it would be the largest daily percentage decrease on record since the company went public in October 2020, according to Dow Jones market data.
Foghorn announced that the Food and Drug Administration has placed the study of drug FHD-286, which treats patients with relapsed and/or stubborn acute myelogenous leukemia (AML) and myelodysplastic syndrome, on hold. No new patients can be added to the study, but patients currently enrolled and benefiting from treatment may continue to receive the drug, Foghorn said on Thursday.
For now, the FDA is seeking a review of the company’s safety database and risk-mitigation strategies, as well as a breakdown of clinical activity across dose levels, after the death of a subject with potential differentiation syndrome, which is a potentially fatal adverse drug reaction.
Analysts tracking the company see this as a short study delay with a clear path to resolution.
Wedbush Securities’ Robert Driscoll maintained his Outperform rating on the stock and compared Foghorn’s situation to a recent partial clinical hold put on
Kura’s Oncology’s
(KURA) ziftomenib, a potential drug being developed for the treatment of AML patients. Even in the case of Kura’s study, there was a patient death that resulted in a two-to-three-month delay.
“Importantly, upon the partial clinical hold lifting, KURA continued enrollment into the two dose cohorts without any additional changes around the dose cohorts being evaluated, and noted physician interest in the study remained high,” Driscoll noted.
Analyst Andrew Fein from H.C. Wainwright Research also reiterated his Buy rating on the stock. Fein said while the complete mechanism of how differential syndrome arises isn’t fully understood, its occurrence has been documented in roughly one-third of AML patients.
“We believe the hold is transient and will not influence approval in the long run,” Fein noted. However, he does believe the stock will be rangebound until further clarity is garnered.
All five analysts tracking Foghorn on FactSet rate it as Buy.
Write to Karishma Vanjani at karishma.vanjani@dowjones.com
Read More: Foghorn Stock Plunges After a Patient’s Death. Analysts Say It’s Still a Buy.