Back to top

Image: Bigstock

ACER's Stock Down on Failure of Phase II Study, Cash Updates

Read MoreHide Full Article

Acer Therapeutics (ACER - Free Report) announced top-line results from its phase IIa proof of concept study to evaluate ACER-801 (osanetant) as a potential treatment for moderate to severe Vasomotor Symptoms (VMS) associated with menopause. The study candidate, ACER-801, did not achieve statistical significance in terms of its ability to decrease the frequency or severity of hot flashes in postmenopausal women. The drug, however, met its safety standards and was overall well-tolerated. The stock of the company was down 57% on Friday.

In the past year, the shares of Acer Therapeutics have dived 75.7% compared with the industry’s decline of 18.2%.

Zacks Investment Research
Image Source: Zacks Investment Research

ACER-801 is an investigational non-hormonal, neurokinin 3 receptor (NK3R) antagonist, currently under study for the potential treatment of patients with VMS, prostate cancer and post-traumatic stress disorder. In January 2018, the company entered into an exclusive license agreement with Sanofi (SNY - Free Report) . Per the agreement, Acer acquired worldwide rights to osanetant from Sanofi, to develop osanetant as a potential treatment for certain neuroendocrine-related disorders. 

The phase IIa study of ACER-801 enrolled 49 postmenopausal women aged 40-65 who experienced moderate to severe hot flashes. The patient population was divided into four cohorts, each receiving either twice daily 50 mg, 100 mg, 200 mg of ACER-801 or placebo over a 14-day treatment period. The primary endpoints of the study were safety and pharmacokinetics. There was an additional secondary endpoint evaluating efficacy against treatment with placebo. Post the announcement of its dismal results, the company has decided to pause the ACER-801 program and intends to conduct a comprehensive analysis of all available data from the study. 

Acer already has an approved drug in its portfolio, Olpruva (sodium phenylbutyrate), for the treatment of urea cycle disorders, involving deficiencies of carbamylphosphate synthetase, ornithine transcarbamylase or argininosuccinic acid synthetase. Olpruva was approved by the FDA in December last year for the said indication. The company also initiated a phase III DISCOVER study of Edviso (celiprolol) for the treatment of patients with COL3A1-positive vascular Ehlers-Danlos Syndrome in June 2022.

In the same press release, Acer announced that the company is running out of its cash runway for funding operations. Its existing cash and cash equivalents are expected to fund its anticipated operating and capital requirements into early in the second quarter of 2023. Acer will be needing additional financing to be able to successfully launch Olpruva in the U.S. market. However, the company failed to give any assurance regarding the availability of the needed capital under acceptable terms and within the timeframe at present. If the company does not obtain the needed funds, Acer will be forced to delay,limit, reduce or terminate its product development, other operations or commercialization efforts or suspend or restructure its business. This has also contributed to the significant plunge in stock price, which Acer experienced on Friday.


Zacks Rank and Stocks to Consider

Acer Therapeutics currently has a Zacks Rank #3 (Hold).

A few stocks worth considering are Avalo Therapeutics (AVTX - Free Report) and Aziyo Biologics (AZYO - Free Report) , both carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

In the last 90 days, Avalo’s loss estimates for the year 2023 have narrowed from $3.62 to $2.57 per share. In the past year, the shares of Avalo have plunged 72.5%.

AVTX beat estimates in two of the last three reported quarters, delivering an average earnings surprise of 37.83%.

In the last 90 days, Aziyo’s loss estimates for the year 2023 have narrowed from $2.14 to $1.65 per share. In the past year, the shares of Aziyo have fallen 9.5%.

AZYO beat estimates in one of the last four reported quarters, missing the mark on the other three occasions. The average loss surprise was 15.24%.

Published in