Here’s Why Versartis Inc (VSAR) Shares Crashed Today


Friday turned out to be a nightmare for Versartis Inc (NASDAQ:VSAR) investors, after the drug maker reported negative Phase 3 VELOCITY data in pediatric GHD patients. In the pivotal study, treatment with twice-monthly somavaratan did not demonstrate non-inferiority as measured by the difference of mean annualized height velocities between the drug and active comparator Genotropin (intent-to-treat (ITT) population).

Versartis shares reacted to the news, crashing over 80% to $3.45 in pre-market trading.

Versartis CEO Jay Shepard commented, “We are very surprised and disappointed to learn the outcome of the VELOCITY trial. Somavaratan showed height velocity in the range we had hoped, but it was not sufficient to demonstrate non-inferiority in this trial […] We have done an initial analysis of the top-line data and are continuing to thoroughly review the results to gain greater insight into the trial outcome. We plan to provide a corporate update later this year. I would like to thank the investigators, pediatric GHD patients and families that participated in the VELOCITY trial.”

On the ratings front, VASR has been the subject of a number of recent research reports. In a report released today, Cowen analyst Ken Cacciatore downgraded VSAR to Hold. Separately, Cantor’s Elemer Piros maintained a Buy rating on the stock, while lowering the price target to $14 (from $34).

According to TipRanks.com, which ranks over 7,500 financial analysts and bloggers to gauge the performance of their past recommendations, Ken Cacciatore and Elemer Piros have a yearly average return of 1.5% and 4.7% respectively. Cacciatore has a success rate of 36% and is ranked #2312 out of 4657 analysts, while Piros has a success rate of 47% and is ranked #1352.

Overall, one research analyst has assigned a Hold rating and 3 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 $22.67 which is 5% above where the stock closed yesterday.

Versartis is an endocrine-focused biopharmaceutical company. It develops long-acting therapeutic proteins for the treatment of endocrine disorders. The company develops new therapeutic proteins utilizing the novel half-life extension technology XTEN.