Shares of IBD 50 stock Travere Therapeutics plummeted Friday after the Food and Drug Administration accepted its review application for a rare kidney disease drug — with one caveat.
The FDA will hold an advisory committee meeting to discuss the benefits and risks of Travere's Filspari in patients with focal segmental glomerulosclerosis, or FSGS. In this condition, scarring builds up on the kidney's filtering units, called glomeruli. This leads to a decline in kidney function.
"On the surface, we can understand where the knee-jerk reaction may be concern on the probability of an approval," Wedbush analyst Laura Chico said in a report. "However, stepping back, we note this represents a major advancement in the FSGS space."
Travere Therapeutics stock crashed 20.6%, closing at 16.80.
Another Filspari Approval?
Filspari is already approved to treat another kidney condition called IgA nephropathy, in which IgA antibodies build up on the kidneys, causing inflammation and damage. But it would be the first-ever treatment approved for FSGS.
A working group called Parasol recently outlined a new approach to testing FSGS drugs. Historically, companies have had to show improvement in estimated glomerular filtration rate, or eGFR, a test that measures how well the kidneys are filtering blood. But the field agrees eGFR is a poor measure of how well FSGS drugs are working due to differences in how the disease affects each patient.
Instead, the group suggested companies test to see if their drugs can improve proteinuria, the level of protein that spills out into patients' urine. High levels of proteinuria suggest the kidneys aren't doing their job. Lower levels are more promising for kidney function.
"Considering this is the first potential full approval based on proteinuria, we are not that surprised by the AdCom disclosure and view the stock as oversold after hours," Leerink Partners analyst Joseph Schwartz said in a report late Thursday.
Analysts Bullish On Travere Stock
Wedbush's Chico expects the advisory committee meeting in the fourth quarter, ahead of the potential approval date on Jan. 13. She notes the potential approval based on proteinuria will likely open the regulatory door to increased FSGS drug development.
"We can understand where FDA would want to ensure the review and endpoints make sense," she said.
She kept her outperform rating on Travere Therapeutics stock. Chico says 10 months of lead is ample time for the company to prepare for an advisory committee meeting.
Similarly, Leerink's Schwartz rates Travere stock an outperform. He acknowledged the unease advisory committee meetings tend to cause for investors. Biohaven plunged on Thursday after the FDA unexpectedly assigned an advisory committee meeting for its potential rare-disease drug.
"Investors never like AdCom meetings as they introduce some regulatory uncertainty, especially as we can never fully predict where the conversation could go," he said. "However, as we recently discussed with management, given the novel path to approval, it is not all that surprising to see this decision."
Follow Allison Gatlin on X/Twitter at @AGatlin_IBD.
