Shares of Travere Therapeutics shot higher Wednesday after the Food and Drug Administration eliminated a key step to approving its drug, Filspari, for another kidney disease.
Previously, the FDA indicated it would need to hold an advisory committee meeting to discuss the merits of Filspari in patients with focal segmental glomerulosclerosis, or FSGS. This disease causes scarring in the glomeruli, the tiny filters of the kidneys. Filspari is already approved to treat IgA nephropathy, or IgAN, another condition that causes scarring in the glomeruli.
Advisory committees weigh the benefits and risks of a drug before making a recommendation on whether the FDA should approve them. This would be the first approval in FSGS treatment and the first approval based on proof of a drug lowering protein in the urine, or proteinuria. A group called PARASOL helped establish proteinuria as a goal for studies of kidney disease drugs.
"We think the cancellation bodes well for eventual approval, as many of the items that were likely to be discussed at the meeting were already touched upon at PARASOL," Leerink Partners analyst Joseph Schwartz said in a report. "Moreover, this is a very high unmet need, where we believe the risk/benefit of therapy is clear."
On the stock market today, Travere Therapeutics stock surged 26.2%, closing at 27.31. Earlier in the session, shares hit a three-year high of 28.69.
Shares have a strong IBD Digital Composite Rating of 96. This CR measures fundamental and technical measures, pitting them against all other stocks. In these terms, Travere stock outranks 96% of all stocks.
Travere Therapeutics Eyes Jan. 13 Potential Approval
There's little indication why the FDA made the decision, analysts said.
Wedbush Securities analyst Laura Chico noted the PARASOL working group likely did enough work to prove the proteinuria clinical study goal. But, also, the FDA is likely facing constraints following a slew of layoffs earlier in the year. She noted there were no personnel changes among FDA employees responsible for Travere Therapeutics' Filspari application for approval.
Further, Leerink's Schwartz said supplemental new drug applications tend to have a "modestly lower regulatory threshold." This would be a supplemental NDA because Filspari is already approved as an IgAN treatment.
The potential approval date remains Jan. 13.
Schwartz forecasts $1.1 billion in gross peak sales, accounting for the U.S. and Europe. He rates Travere Therapeutics stock an outperform.
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