Travere Therapeutics (TVTX) - Get Report shares dropped on Wednesday as analysts reacted negatively to its decision to drop its quest for quick FDA clearance of its candidate treatment for a rare kidney disease.
The disease is focal segmental glomerulosclerosis, which is estimated to affect up to 40,000 patients in the U.S. and about the same amount in Europe.
"The disorder is defined by progressive scarring of the kidney and often leads to end-stage kidney disease," the San Diego company said in a statement.
“The company no longer expects to submit [its sparsentan treatment] for accelerated approval for FSGS in the U.S. during the second half of 2021,” Travere said.
It recently traded at $14.78, down 17%. The stock was off 35% in 2021 through the close of Tuesday's trading.
Wedbush analyst Laura Chico downgraded Travere to neutral from outperform and nearly halved her price target to $19 from $37 after the company’s decision.
Travere needs “regulatory buy-in,” she noted, according to Bloomberg. This represents a “potentially precedent-setting event,” which will require agreement with the Food and Drug Administration.
“Regulatory setbacks can be challenging to overcome,” as they scare investors, she said.
SVB Leerink analyst Joseph Schwartz cut his price target to $27 from $35 but affirmed his outperform rating.
Travere’s decision wasn’t a shock, given increased FDA scrutiny, he said, according to Bloomberg.
The news is merely a “speed bump,” he said. Commercialization for sparsentan may just be extended six months in the U.S.
In other drug news, an FDA report Tuesday offered a positive assessment of a study of Provention Bio PRVB’s teplizumab type1 diabetes treatment.
Also Tuesday, Moderna MRNA said its COVID vaccine was successful in a study of adolescents aged 12 to 17.