ChemoCentryx Inc (NASDAQ: CCXI) tanked roughly 60% in the stock market on Friday as approval for its drug for an autoimmune disease hung in the balance.
ChemoCentryx is seeking FDA approval for Avacopan as a treatment for Antineutrophil Cytoplasmic Autoantibody (ANCA)-associated vasculitis (or AAV). According to analyst Joseph Schwartz of SVB Leerink, some members on the panel of experts raised concerns regarding the study design, with a few demanding that ChemoCentryx runs additional tests to assess liver toxicity.
Schwartz cut his price target on ChemoCentryx to £12.16
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Cutting his price target on ChemoCentryx from £60.10 to £12.16, Schwartz said:
“Given the mostly split vote, we now lack conviction in a positive FDA decision, since it seems likely that the agency will take a harsher stance than the panel.â€
Out of a total of 18 members on the FDA advisory committee, eight warned that the benefits failed to outweigh the risks and that the safety results were not sufficient to support approval. The U.S. Food and Drug Administration is not liable to accept the panel’s recommendation at all times, but more often than not, it does.
The late-stage trial for Avacopan, as per ChemoCentryx, saw participation from 331 patients that were given either the standard course of drugs or a combination using Avacopan. Both groups of patients, however, were also given Glucocorticoids, which are commonly used to treat the autoimmune disorder but were not officially designated in ChemoCentryx trial. According to Schwartz:
“The panel of experts and the agency seemed to agree that the use of non-study supplied glucocorticoids makes it challenging to interpret the results, muddying the comparison between the two groups.â€
Schwartz also highlighted that Avacopan-treated patients showed signs of liver injuries – a matter of further concern for the members of the panel.
ChemoCentryx had already slid 43% in the stock market on Tuesday
The news comes only days after ChemoCentryx had slipped about 43% in the stock market as the FDA released the briefing documents on Tuesday. The San Carlos-based company opened at £8.62 per share on Friday and are currently exchanging hands at an even lower £7.83 per share. The price marks its lowest since November 2019.
In comparison, ChemoCentryx was reported trading at an all-time high of £48.70 per share in early February. At the time of writing, the Nasdaq-listed firm has a market capitalisation of £552 million.
