In a research note issued today, healthcare analyst Alan Carr of Needham walks investors through this week’s Trevena (TRVN) bloodbath. Shares are down nearly over 10% as an FDA advisory committee voted 7-8 against Trevena’s pain drug candidate Oliceridine. Committee members in favor of approval indicated oliceridine may be an attractive alternative for patients who do not tolerate morphine. Those opposed were concerned by efficacy at low dose and size of safety profile.
FDA documents released earlier this wk indicate agency has concerns around size of safety database and hepatic and QT prolongation risks. Agency also believes efficacy data should be evaluated w/ SPID score, rather than responder analysis. Under FDA analysis, oliceridine efficacy appears less impressive.
The FDA is scheduled to make its final decision on or before November 2, 2018 — although that’s more of a goal than a deadline. While technically this was only an advisory vote by the committee of outside experts and the FDA gets the final say, it’s pretty rare for the agency to go against a committee’s negative recommendation.
Carr commented, “Key concerns of committee members included size of safety database and differentiation from morphine. FDA documents released this wk reflect agency hesitation towards overall profile in relation to placebo and morphine as well as size of safety database. PDUFA date is 11/2/18. Given a negative AADPAC vote and apparent absence of favorable conviction at FDA, we now believe oliceridine approval is improbable. We are consequently downgrading to HOLD (was BUY). Even if oliceridine is approved next month, Trevena will face challenges obtaining adequate financial resources to support commercial launch in 2019 ($63.5M cash 2Q18). Other assets in Trevena pipeline may merit development. We await FDA decision and company strategy w/ rest of pipeline.” (To watch Carr’s track record, click here)
While Carr moves to the sidelines waiting for the company to reset itself, 3 other analysts on Wall Street still anchor a bullish perspective on the drug maker. At this point, the 12-month average price target stands at $8.25, marking a nearly a 944% upside from where the stock is currently trading. (See TRVN’s price targets and analyst ratings on TipRanks)