Achaogen (AKAO): Will cUTI Asset Impress Today’s AdCom? Cowen Shares Two Cents

Cowen's Chris Shibutani likes AKAO's risk-reward set up ahead of today's AdCom Meeting review of plazomicin.


Today’s the big day: the day Achaogen (NASDAQ:AKAO) complicated urinary tract infection (cUTI) candidate plazomicin will stand before the Antimicrobial Drugs AdCom today. Already, the briefing documents released by the FDA ahead of today’s meeting looked positive for AKAO’s asset to win a green light. Can Wall Street expect approval?

Cowen analyst Chris Shibutani believes that the FDA’s safety assessment points to approval in cUTI. However, there could be “some risk” when it comes to the Limited Population Antimicrobial Drug (LPAD). The public review of “limited use indication” that AKAO seeks for indications in both cUTI as well as bloodstream infections (BSI) is one Shibutani deems as “precedent-setting under the LPAD […] approval pathway.” The analyst notes, “The challenge centers on how the FDA addresses data limitations under the LPAD pathway for BSI and whether ‘limited use’ language will cloak both indications.”

Betting on this biotech player’s risk-reward, the analyst reiterates an Outperform rating on AKAO stock without listing a price target. (To watch Shibutani’s track record, click here)

In fact, Shibutani believes sizes up consensus expectations to be upbeat as well, anticipating that the agency’s analysis of data could spell out a favorable decision.  Ultimately, “The FDA’s review of the EPIC trial data seems relatively uncontroversial […] Even over the course of various trial modifications during the study, which were agreed upon with the FDA, efficacy thresholds were met, even when applying variations on the agency’s analysis of the data. More importantly, wording describing the overall safety analysis—including risks associated with nephrotoxicity […]—suggested the FDA is sufficiently comfortable with the agent’s tolerability, as well. […] Amidst what we consider to be a broadly favorable regulatory backdrop for antibiotics that address significant unmet needs associated with antimicrobial resistance, we remain confident in a favorable recommendation and approval for plazomicin for the cUTI indication overall,” surmises Shibutani.

TipRanks exhibits this drug maker as a strong bullish bet on the Street. In a unanimous vote of confidence, all 4 analysts polled in the last 3 months rate a Buy on AKAO stock. With a return potential of 68%, the stock’s consensus target price stands at $24.75.

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