Savient Investors Expect a Sale
The U.S. Food and Drug Administration announced the approval of Krystexxa Tuesday night as a treatment for patients with gout who fail to respond to earlier therapy. Savient tried and failed to get Krystexxa approved more than a year ago due to manufacturing problems that caused FDA to prolong the drug's review.
In May, Savient announced that the company would try to sell itself if Krystexxa were to be approved. For investors in Savient, this means that the next key event is not Krystexxa's commercial launch but an announcement from management that a buyer willing to pay a premium for the company has been found.
Savient's stock price was up more than $3 to $18 a share in Tuesday night's after-hours trading session. The stock closed at $14.76 in Tuesday's regular session.Gout is a disease in which uric acid builds up in the bloodstream and collects in the joints, where it can cause painful swelling and stiffness. Krystexxa's approval is for patients with so-called refractory disease, meaning other drugs commonly used to treat gout are ineffective for them. "About 3 percent of the three million adults who suffer from gout are not helped by conventional therapy. This new drug offers an important new option for them," said Dr. Badrul Chowdhury, director of the FDA division that reviewed and approved Krystexxa, in a statement released by the agency. The FDA, concerned about some of the side effects of Krystexxa, approved the drug with a black box label that warns doctors about possible severe allergic reactions to the drug. Savient must also abide by a risk management plan for Krystexxa that includes a medication guide for patients and information for doctors to educate them on the risk of severe allergic reactions tied to Krystexxa. Savient, in a statement released Tuesday night, said for the first time that the company was preparing for a commercial launch of Krystexxa later this year. Given the company's plans to sell the company and expectations that the buyer would be responsible for Krystexxa's launch, Savient's stock price could react negatively were the company to actually start selling the drug before announcing an acquisition. Analysts, on average, are forecasting peak U.S. Krystexxa sales of around $230 million, with the individual sales estimates varying largely on the calculation of the number of gout patients who will be eligible for treatment with Krystexxa.
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