Drug developer Disc Medicine's shares (NASDAQ:IRON) fell nearly 5% to $59.46 on Friday following the company's disclosure of a potential material weakness in its internal control over financial reporting for the fiscal year ending December 31, 2024.
In a regulatory filing, the company revealed that the issue stemmed from ineffective Information Technology General Controls (ITGC).
These controls are critical policies designed to secure and maintain the proper functioning of the company’s IT systems, particularly those linked to key financial reporting.
Despite the identified weakness, Disc Medicine assured investors that no misstatements have been found in its financial statements to date.
The company also noted that its external auditor has not yet completed the audit of its internal controls and cannot provide an opinion at this stage.
The market reaction comes despite the company's shares gaining 6.1% in 2024 and strong analyst support.
According to data from LSEG, all 11 brokerages covering the stock rate it as a "buy" or higher, with a median price target of $90.