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Reata (RETA) Falls on Negative Advisory Committee Outcome
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Shares of Reata Pharmaceuticals are down more than 42% in pre-market trading, following a negative advisory outcome related to its new drug application for one of its lead pipeline candidates, bardoxolone methyl. The NDA is seeking approval for the candidate for treating patients with chronic kidney disease (“CKD”) caused by the Alport syndrome.
The Cardiovascular and Renal Drugs advisory committee reviewing bardoxolone NDA does not believe that clinical data provided with the NDA support effectiveness of the candidate in slowing the progression of CKD in patients with Alport syndrome. The committee noted that the benefits of treatment with bardoxolone does not seem to outweigh its risks.
The negative outcome of the FDA advisory committee was expected as briefing document released by the FDA earlier this week ahead of the advisory committee highlighted similar concerns. This led to a 40% plunge in Reata’s share price on Dec 6.
The FDA will continue to review the NDA and a final decision is expected by Feb 25, 2022. Although the FDA is not bound to follow its advisory committee recommendations, it takes the committee vote into account while providing its decision on a potential approval.
We note that the bardoxolone NDA has faced another setback previously. In August, the FDA had raised four significant clinical and statistical review issues related to the NDA. Although the company had submitted its response, the recent advisory committee outcome implies that it was not enough.
Reata is currently working closely with the FDA and will provide any additional data, if requested.
Reata is dependent on the successful development of bardoxolone as it is one of the company’s lead pipeline candidates. Any delay or failure to get approval for bardoxolone will hurt the company’s prospects.
Reata’s shares have declined 56% so far this year compared with the industry’s decrease of 20.4%.
Image Source: Zacks Investment Research
Please note that the development of Reata’s other lead pipeline candidate, omaveloxolone, has also been marred by setbacks. The company is developing omaveloxolone as a potential treatment for Friedreich’s ataxia.
Following the completion of a pivotal study on the candidate in 2019, Reata was advised to conduct a second pivotal study by the FDA. However, following discussions with the FDA, Reata managed to get its recommendation for a baseline-controlled study (crossover study), which supported a shorter development period. However, following an internal review, the FDA stated that the data from the baseline-controlled study do not strengthen the results of the pivotal study and requested additional data in November 2020. The additional study and data requests have delayed the submission of the NDA.
In May 2021, the FDA asked the company to request a pre-NDA meeting to discuss study data on omaveloxolone. Following the successful completion of the meeting in September, Reata planned to submit an NDA for omaveloxolone in the first quarter of 2022.
The delay in the commercialization of these products will also delay benefits from the company’s investments in developing them. The company’s high operating expenses to support the development and pre-commercialization activities for these candidates are putting pressure on its cash resources. With no regular revenue stream, concerns related to the company’s sustainability may arise amid high costs.
Loss per share estimates for Vascular Biogenics have narrowed from 44 cents to 42 cents for 2021 and from 40 cents to 37 cents for 2022 in the past 30 days.
Shares of Vascular Biogenics have risen 18.5% so far this year.
Loss per share estimates for Aptosehave improved from 68 cents to 66 cents for 2021 and from 92 cents to 78 cents for 2022 in the past 30 days.
Aptose delivered an earnings surprise of 7.02%, on average, in the last four quarters.
Loss per share estimates for IVERIC bio have improved from $1.18 to $1.09 for 2021 and from $1.17 to $1.03 for 2022 in the past 30 days.
IVERIC bio’s stock has surged 114% so far this year.
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Reata (RETA) Falls on Negative Advisory Committee Outcome
Shares of Reata Pharmaceuticals are down more than 42% in pre-market trading, following a negative advisory outcome related to its new drug application for one of its lead pipeline candidates, bardoxolone methyl. The NDA is seeking approval for the candidate for treating patients with chronic kidney disease (“CKD”) caused by the Alport syndrome.
The Cardiovascular and Renal Drugs advisory committee reviewing bardoxolone NDA does not believe that clinical data provided with the NDA support effectiveness of the candidate in slowing the progression of CKD in patients with Alport syndrome. The committee noted that the benefits of treatment with bardoxolone does not seem to outweigh its risks.
The negative outcome of the FDA advisory committee was expected as briefing document released by the FDA earlier this week ahead of the advisory committee highlighted similar concerns. This led to a 40% plunge in Reata’s share price on Dec 6.
The FDA will continue to review the NDA and a final decision is expected by Feb 25, 2022. Although the FDA is not bound to follow its advisory committee recommendations, it takes the committee vote into account while providing its decision on a potential approval.
We note that the bardoxolone NDA has faced another setback previously. In August, the FDA had raised four significant clinical and statistical review issues related to the NDA. Although the company had submitted its response, the recent advisory committee outcome implies that it was not enough.
Reata is currently working closely with the FDA and will provide any additional data, if requested.
Reata is dependent on the successful development of bardoxolone as it is one of the company’s lead pipeline candidates. Any delay or failure to get approval for bardoxolone will hurt the company’s prospects.
Reata’s shares have declined 56% so far this year compared with the industry’s decrease of 20.4%.
Please note that the development of Reata’s other lead pipeline candidate, omaveloxolone, has also been marred by setbacks. The company is developing omaveloxolone as a potential treatment for Friedreich’s ataxia.
Following the completion of a pivotal study on the candidate in 2019, Reata was advised to conduct a second pivotal study by the FDA. However, following discussions with the FDA, Reata managed to get its recommendation for a baseline-controlled study (crossover study), which supported a shorter development period. However, following an internal review, the FDA stated that the data from the baseline-controlled study do not strengthen the results of the pivotal study and requested additional data in November 2020. The additional study and data requests have delayed the submission of the NDA.
In May 2021, the FDA asked the company to request a pre-NDA meeting to discuss study data on omaveloxolone. Following the successful completion of the meeting in September, Reata planned to submit an NDA for omaveloxolone in the first quarter of 2022.
The delay in the commercialization of these products will also delay benefits from the company’s investments in developing them. The company’s high operating expenses to support the development and pre-commercialization activities for these candidates are putting pressure on its cash resources. With no regular revenue stream, concerns related to the company’s sustainability may arise amid high costs.
Reata Pharmaceuticals, Inc. Price
Reata Pharmaceuticals, Inc. price | Reata Pharmaceuticals, Inc. Quote
Zacks Rank & Stocks to Consider
Reata currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks from the biotech sector include Vascular Biogenics , Aptose Biosciences (APTO - Free Report) and IVERIC bio , all carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Loss per share estimates for Vascular Biogenics have narrowed from 44 cents to 42 cents for 2021 and from 40 cents to 37 cents for 2022 in the past 30 days.
Shares of Vascular Biogenics have risen 18.5% so far this year.
Loss per share estimates for Aptosehave improved from 68 cents to 66 cents for 2021 and from 92 cents to 78 cents for 2022 in the past 30 days.
Aptose delivered an earnings surprise of 7.02%, on average, in the last four quarters.
Loss per share estimates for IVERIC bio have improved from $1.18 to $1.09 for 2021 and from $1.17 to $1.03 for 2022 in the past 30 days.
IVERIC bio’s stock has surged 114% so far this year.