Edgewise Therapeutics (EWTX) remains a compelling cardiology story despite investor concerns around atrial fibrillation risk and the near-term catalyst path, with EDG-7500 potentially emerging as a best-in-class treatment for hypertrophic cardiomyopathy, RBC Capital Markets said.

The firm said in a Tuesday note that the stock's sharp reaction to the company's 12-week data release appears to be an "overreaction."

RBC said it found no convincing evidence linking EDG-7500 to atrial fibrillation, noting that both atrial fibrillation events occurred in obstructive hypertrophic cardiomyopathy patients and none were observed in the nonobstructive cohort.

The note said efficacy in both obstructive and nonobstructive hypertrophic cardiomyopathy was positive, with some measures potentially deepening over time.

RBC also highlighted the potential for regulatory updates and pipeline developments to bridge the gap to phase 3 readouts.

The firm raised its probability of success estimate for EDG-7500 to 60%.

RBC maintained its outperform rating on Edgewise and increased its price target to $59 from $48.

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