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Analysts React To FDA AdCom Vote On ChemoCentryx's Avacopan, Stock Plunges

05/07/2021 10:17
  • Yesterday, the FDA’s Arthritis Advisory Committee panelists went through cloudy data while complaining about the design of the Phase 3 trial for ChemoCentryx Inc’s (NASDAQ: CCXI) avacopan. After going over time, they ended up without consensus.
  • This orphan drug has July 7 as its PDUFA date.
  • What do analysts have to say after the AdCom splits slightly in favor of FDA approving this rare disease drug:
  • Raymond James analyst Steven Seedhouse, on a reduced conviction in avacopan approval, downgraded the stock to Outperform from Strong Buy with the price target more than halved to $51 from $120.
    • However, if approved, Seedhouse still thinks avacopan is a blockbuster drug and will be adopted as a standard of care in ANCA vasculitis.
    • Seedhouse is not changing avacopan estimates (~$1.9 billion in peak sales), but now the probability of success stands at 50% vs. 100% prior.
    • He also notes that Avacopan should be approved and said, “we think certain AdCom panelists were unreasonable and unprepared.”
  • H.C. Wainwright analyst Edward White lowered the firm’s price target to $28 from $101 and kept a Buy rating on the stock.
    • White believes the mixed FDA panel opinion is negative for the drug’s potential approval and a significant negative for the stock.
    • White notes that in their opinion, the FDA does not have to follow the recommendations of the AdCom, but the attitude of the FDA before the meeting and during the meeting does not bode well for approval.
    • Sees the probability of success estimate at 15%, down from 85%.
  • SVB Leerink analyst Joseph Schwartz downgraded the firm stock to Market Perform from Outperform. 
    • Schwartz notes, “FDA briefing documents are surprisingly critical” and suggests that CCXI has an uphill battle to convince the AdCom that avacopan should be approved in ANCA-associated vasculitis.
  • Price Action: CCXI shares have dropped 61.7% at $10.53 during the premarket trading on the last check Friday.