Biomea Fusion's Stock Plummets After Price Target Cut — Bearish Retail Traders Speculate Next Moves

Shares of Biomea Fusion attracted significant retail attention on Tuesday after H.C. Wainwright reduced its price target for the stock to $18 from $40, while maintaining a ‘Buy’ rating. 

The reduction followed the company’s first-quarter earnings report, where Biomea unveiled a strategic shift to focus on its core diabetes and obesity programs. 

As part of its strategy, Biomea has implemented a cost-reduction initiative, which includes a workforce reduction of nearly 35% to reduce overall operating expenses and extend its cash runway into Q4 2025.

The firm also removed type 1 diabetes from its projections and pushed the launch of icovamenib for type 2 diabetes to 2031 from the previously anticipated 2029.

Biomea’s stock price declined by 16.5%, closing at $1.67 on May 6, 2025. However, it rebounded slightly in after-hours trading, increasing by 1.74% to $1.70.

Retail sentiment surged on Stocktwits, where sentiment was ‘bearish’ views amid a 1,400% uptick in message volume. 

The sentiment seemed to reflect speculation about the company’s next moves and the market’s potential reactions.

One user questioned the company’s decision to delay share dilution when the stock was priced at $4 earlier this year, suggesting that the current price of $1.60 might not align with Biomea’s broader plans, hinting that something was amiss. 

Meanwhile, another user speculated that Biomea's recent actions could indicate a “short trap” and accumulation of shares ahead of potential positive news. 

The user pointed out that despite concerns of running out of cash, Biomea had not raised funds through share sales but instead reduced its workforce to stretch its runway.

In its Q1 update, interim CEO Mick Hitchcock highlighted the company’s efforts to prioritize high-value opportunities, extend its cash runway, and maintain its focus on icovamenib and BMF-650. 

Biomea also reported a Q1 net loss of $29.3 million, with cash reserves of $36.2 million, expected to fund operations until Q4 2025.

Shares of Biomea have fallen 54.7% so far this year.

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