CEMP

Friday turned out to be a nightmare for Cempra Inc (NASDAQ:CEMP) investors after the FDA released nagative briefing documents for CEMP’s Friday Adcom of solithromycin, a new macrolide antibiotic to treat community-acquired pneumonia, or CAP.

According to the FDA reviewers, “A significant safety signal for hepatotoxicity was observed in the solithromycin development program.” Moreover, “The likelihood of serious idiosyncratic hepatic liver injury in a larger population and the impact of prior sensitization to macrolides on solithromycin-induced liver injury are unknown,” implying a potential need for additional clinical studies.

Cempra shares reacted to the issues highlighted in the documents, falling nearly 46% to $10.15. CEMP has a 1-year high of $34.24 and a 1-year low of $11.40. The stock’s 50-day moving average is $23.59 and its 200-day moving average is $19.96.

On the ratings front, Cempra has been the subject of a number of recent research reports. In a report issued on October 28, Roth Capital analyst Michael Higgins reiterated a Buy rating on CEMP, with a price target of $34, which represents a potential upside of 189% from where the stock is currently trading. Separately, on the same day, Cowen’s Ritu Baral reiterated a Buy rating on the stock and has a price target of $31.

According to TipRanks.com, which ranks over 7,500 financial analysts and bloggers to gauge the performance of their past recommendations, Michael Higgins and Ritu Baral have a yearly average loss of -14.6% and a return of 2.2% respectively. Higgins has a success rate of 32% and is ranked #3932 out of 4173 analysts, while Baral has a success rate of 36% and is ranked #959.

Overall, 5 research analysts have given a Buy rating to the stock. When considering if perhaps the stock is under or overvalued, the average price target is $31.50 which is 168.1% above where the stock opened today.

Cempra, Inc. engages as a clinical-stage pharmaceutical company, which focuses on the development of antibacterials to meet critical medical needs. Its antibiotic candidates includs Solithromycin and Taksta. The company was founded by Prabhavathi B. Fernandes on November 18, 2005 and is headquartered in Chapel Hill, NC.