Edgewise Therapeutics (EWTX) could benefit from EDG-7500's differentiated drug profile, a potentially lighter phase 3 monitoring approach and possible validation from rival studies, though elevated takeover expectations may make a phase 3 start disappointing for some investors, Oppenheimer said.

EDG-7500's mechanism may help limit effects on heart pumping strength, supporting the company's proposed phase 3 design if upcoming US FDA feedback is favorable, the investment firm said in a note Thursday.

Oppenheimer expects EDG-7500 to compete more on lower monitoring needs and potential benefits in non-obstructive hypertrophic cardiomyopathy than on the size of reductions in heart pressure gradient, while atrial fibrillation remains an area of uncertainty because EDG-7500 could have stronger effects in atrial heart cells, though improved heart relaxation could also reduce some factors linked to the condition.

Oppenheimer also became more cautious on possible M&A, saying recent investor expectations appear elevated and Novartis may favor Cytokinetics because it offers an approved, revenue-producing asset, according to the note.

Oppenheimer kept its outperform rating and $56 price target for Edgewise Therapeutics.

The company's shares were down more than 4% in Friday afternoon trading.

Price: 39.43, Change: -1.73, Percent Change: -4.20