Savient Shareholders Optimistic

Shares of Savient Inc. (SVNT) jumped the most in eight months on Friday after US health regulators said the company’s gout treatment appears to be effective.

Since it began reviewing the company’s application last December, the Food and Drug Administration has already delayed a verdict regarding approval of the drug, Krystexxa, once. In its briefing memo before a panel meeting on Tuesday, the FDA said although it "does not dispute the efficacy" of the drug, it would focus its attention on safety issues.

Clinical trials of the drug have shown potential for deadly side effects like heart problems and allergic reactions. But FDA's Dr. Bob Rappaport said, "Because most of the patients developing the serious cardiovascular adverse events had other cardiovascular risk factors... there was uncertainty concerning whether the cardiovascular adverse events represent a genuine safety signal.”

The FDA will now ask its advisory panel whether benefits of the drug outweigh its risks before deciding on its approval on August 1. While the agency has been known to generally follow the panel’s suggestion, instances of aberration are on the rise.

Krystexxa is targeted at patients who suffer from a buildup of uric acid in the body where other therapies have not worked. Investors chose to see the FDA’s comments as a positive in the way of the drug’s approval despite daunting safety concerns. Savient shares were up nearly 56% to $9.25 at noon on the NASDAQ after touching an intraday high of $9.80 earlier in the session.

Read the full analyst report on SVNT