Ultragenyx Pharmaceutical (RARE) neared a breakout Wednesday after the Food and Drug Administration said it would consider approving the biotech's latest drug ahead of the usual schedule.
XOn the stock market today, Ultragenyx stock jumped 6.7%, to 83.90. Shares are approaching a buy point at 87.43 out of a consolidation.
The news likely came as a surprise, Piper Jaffray analyst Christopher Raymond said. Ultragenyx has been relatively cautious about the prospect of winning approval after Phase 2 studies. It could mean the biotech won't have to run a Phase 3 study for the drug called triheptanoin in treating a disorder called long-chain fatty oxidation, or LC-FAOD.
Raymond called the news "a very welcome surprise."
"This news pulls commercialization forward by upwards of about one year plus," he said in a report. "Additionally, we point out that management's overall tone on the potential for early filing was very cautious. As such, we suspect this news will surprise many investors."
Ultragenyx Phase 2 Testing Complete
Ultragenyx already has Phase 2 data for triheptanoin in treating LC-FAOD. The disease is a group of autosomal recessive conditions that prevent the body from breaking down long-chain fatty acids into energy. Patients often experience severe energy deficiency.
On its second-quarter earnings conference call, Ultragenyx indicated the FDA was concerned that dietary changes by patients in the Phase 2 study could have confounded the results.
"We spoke with Ultragenyx today, who said it is difficult to articulate exactly what has changed for regulators," Raymond James analyst Laura Chico said in a report to clients. "However, all the UX007 (triheptanoin) data has been provided and reviewed at this point."
FDA Meeting Key
The biotech hasn't yet asked the FDA to approve triheptanoin. But the FDA said Wednesday it will allow Ultragenyx to submit an application for the drug based on existing data. Further details will follow after Ultragenyx meets with the FDA later this year, the firm said in a news release.
Chico had previously pushed back her expectations for the launch until 2021. Piper Jaffray analyst Raymond, too, had seen the drug going to market in 2021. Based on Wednesday's news, he now says it's possible triheptanoin could hit the U.S. market by year-end 2019.
Raymond sees $11 million, $43 million and $77 million in 2020-22 sales, respectively. He upped his price target on Ultragenyx stock to 89 from 85, and kept his buy rating.
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The post This Biotech Is Flirting With A Breakout After FDA Decision On Drug appeared first on Investor's Business Daily.
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