ChemoCentryx’s ( CCXI Quick Quote CCXI - Free Report) shares have skyrocketed 164% in the past six months against the industry’s 8.4% decline. Image Source: Zacks Investment Research
This surge is primarily on account of the FDA’s approval of the company’s lead candidate, avacopan, for the treatment of adult patients with anti-neutrophil cytoplasmic autoantibody-associated vasculitis (ANCA-associated vasculitis).
We note that ANCA-associated vasculitis is a systemic disease in which over-activation of the complement pathway further activates neutrophils, causing inflammation and destruction of small blood vessels, and thereby organ damage and failure, with the kidney being the major target.
In October 2021, the FDA
approved avacopan as an adjunctive treatment combined with standard therapy for two main forms of ANCA-associated vasculitis — granulomatosis with polyangiitis and microscopic polyangiitis. The drug is being marketed under the trade name Tavneos.
The FDA approval for Tavenos was primarily based on data from the phase III ADVOCATE study, which demonstrated that treatment with the drug achieved disease remission at 26 weeks, with sustained remission at 52 weeks as measured by the Birmingham Vasculitis Activity Score - the primary endpoint of the study.
Per the company, Tavneos will provide a new and safer mode of treatment to patients with ANCA-associated vasculitis over the current mode of treatments.
Though ChemoCentryx commercially launched the drug in the United States in October, it will primarily focus on patient access to the drug in the initial few quarters of the launch.
To expand access to the drug outside the United States, ChemoCentryx has partnered with Switzerland-based Vifor Pharma to commercialize Tavneos. Per the partnership, ChemCentryx will receive royalties on potential ex-U.S. net sales from Vifor.
The partnership with Vifor has proved fruitful to ChemoCentryx. In Spetember, ChemCentryx announced that Tavneos secured approval for ANCA-associated vasculitis in Japan. This approval was secured by Kissei Pharmaceutical, which has been granted an exclusive license by Vifor Pharma to commercialize Tavneos in Japan. The company also expects to secure approval in the European Union (EU) after
receiving a positive opinion from the Medicinal Products for Human Use for Tavneos for ANCA-associated vasculitis in the last month. A final decision in the EU is expected in January 2022.
Apart from ANCA-associated vasculitis, avacopan is being studied across other autoimmune and inflammatory indications. ChemoCentryx is evaluating avacopan in a registration-supporting ACCOLADE study as a potential treatment for C3G, an ultra-rare disease of the kidney. It plans to schedule a meeting with the FDA in first-half 2022 to discuss the evidence of clinical benefit from the ACCOLADE study.
The company also plans to schedule a meeting with the FDA to discuss the phase III development of avacopan in patients with Hurley Stage 3 (severe) hidradenitis suppurativa, with a goal of initiating a phase III study in those patients in first-half 2022.
ChemoCentryx is also planning to initiate clinical studies for avacopan in lupus nephritis in mid-2022.
Although avacopan shows promise, dependence on a single pipeline candidate is a concern. Other than avacaopan, ChemoCentryx has only one pipeline candidate — an orally-administered PD-1/PD-L1 inhibitor, CCX559 — in early-stage clinical studies that is years away from commercialization. Although the company has initiated commercializing Tavneos I ANCA-associated vasculitis, we do not expect significant revenues in the initial quarters of the launch. Further, any setback related to avacopan in other indications will mar ChemoCentryx’s prospects.
Zacks Rank & Stocks to Consider
ChemoCentryx currently carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the overall healthcare sector include
Endo Pharmaceuticals ( ENDP Quick Quote ENDP - Free Report) , Repligen ( RGEN Quick Quote RGEN - Free Report) and USANA Health Sciences ( USNA Quick Quote USNA - Free Report) . While USANA Health Sciences sports a Zacks Rank #1 (Strong Buy), both Endo Pharmaceuticals and Repligen carry a Zacks Rank #2 (Buy) at present. You can see . the complete list of today’s Zacks #1 Rank stocks here
USANA Health Sciences’ earnings per share estimates for 2021 have increased from $5.96 to $5.98 in the past 60 days. The same for 2022 has increased from $6.24 to $8.22 in the past 60 days. Shares of USANA Health Scienceshave risen 30.4% in the year so far.
Earnings of USANA Health Sciencesbeat estimates in three of the last four quarters and missed once, with the average surprise being 9.1%.
Repligen’s earnings per share estimates for 2021 have increased from $2.76 to $2.90 in the past 60 days. The same for 2022 has increased from $3.03 to $3.21 in the past 60 days. Shares of Repligen have risen 38.1% in the year so far.
Earnings of Repligen beat estimates in all the last four quarters, the average being 49.2%.
Endo International’s earnings per share estimates for 2021 have increased from $2.32 to $2.85 in the past 60 days. The same for 2022 has increased from $2.25 to $2.29 in the past 60 days.
Earnings of Endo International beat estimates in all the last four quarters, delivering a surprise of 57.7%, on average.