Travere Therapeutics said Thursday its kidney disease treatment, Filspari, failed to pass muster in a confirmatory study, and TVTX stock crashed to a 10-year low.
On today's stock market, shares plummeted 40.7% to 7.64.
Filspari gained accelerated Food and Drug Administration approval in February to treat a kidney disease called immunoglobulin A nephropathy, or IgAN. But the continued approval was contingent upon the confirmatory study that Filspari narrowly failed.
William Blair analyst Tim Lugo noted Travere compared Filspari to a "historically strong" IgAN treatment called irbesartan. The strong comparator caused Filspari to miss the primary goal of the confirmatory study, though secondary measures looked promising, he said in a report.
"It is hard to not acknowledge the risk in shares due to Filspari missing statistical significance in this confirmatory (study) and the negative commercial impact that results will have on Filspari given the premium-priced therapy failing in its strictest assessment of benefit over generic irbesartan," he said.
Lugo downgraded TVTX stock to a market perform rating.
TVTX Stock: Will The FDA Pull Filspari?
It's hard to know how the FDA will proceed from here, Leerink Partners analyst Joseph Schwartz said in a note to clients.
Filspari is the only non-immunosuppressive treatment for IgAN on the market. Further, despite the miss on the study's primary goal, Filspari still showed a clinically meaningful benefit and consistent long-term safety over the study's two years.
"We believe the FDA will work with Travere and do not see a logical path for the agency to pull the drug from the market," he said.
Schwartz kept his outperform rating on TVTX stock.
Travere is planning to meet with the FDA in the fourth quarter before asking for full approval of Filspari. The approval could come through next year.
But William Blair's Lugo noted the results call into question the clinical relevance of Filspari over the standard drug, irbesartan. He doesn't expect the FDA to remove Filspari from the market. But he notes the landscape is becoming increasingly competitive and Travere could struggle commercially.
In response, TVTX stock hit its lowest point since December 2013. Today, Travere shares have a poor Relative Strength Rating of 10, putting their performance over the past 12 months in the bottom 10% of all stocks, according to IBD Digital. A year ago, TVTX stock had an RS Rating of 84.
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