Cowen Spotlights Opportunity in Achaogen (AKAO) Despite BSI Setback

Cowen's Chris Shibutani pinpoints enticing commercial prospects ahead for AKAO's plazomicin.


Achaogen (NASDAQ:AKAO) is approaching its PDUFA date with destiny for complicated urinary tract infection (cUTI) asset plazomicin, which just won over its FDA AdCom. Why was this win not enough to satisfy Wall Street? Notably, the drug maker’s shares went plunging to the market floor after the drug candidate failed to win approval for the blood stream infection indication (BSI).

Cowen analyst Chris Shibutani bets on approval for plazomicin in cUTI come June 25th and even with the “disappointing” AdCom outcome in BSI still recognizes “opportunity in AKAO shares at current levels.” Additionally, though the company’s pivotal Phase 3 C-Scape trial has been pushed out with odds now for 2019 or 2020 instead of this year, the analyst continues to be bullish on superiority and uptake potential following approval.

Therefore, the analyst reiterates an Outperform rating on AKAO stock without listing a price target. (To watch Shibutani’s track record, click here)

“Even as we await details of the form and substance of an FDA approval (which we expect by the June 25th PDUFA), there continues to be a compelling commercial opportunity for plazomicin, a view supported by our KOL consultants,” argues Shibutani.

Ultimately, “While we do not necessarily expect that BSI will be included in the label, there remains the potential for certain aspects of the data to be considered. Certainly beyond the FDA label, there are opportunities for the company to continue in their process of presenting data and educating clinician customers. Our physician consultants believe that regardless of whether a specific approval is achieved, plazomicin will be used in BSI and other infections. Management’s commentary from the call indicates that they remain confident in peak sales potential. We would have expected a stronger potential initial uptake had an outright approval in the BSI indication been attained,” the analyst surmises, noting that the AKAO team’s commentary regarding “salesforce readiness” shines as “reassuring” for plazomicin’s forthcoming launch.

TipRanks showcases AKAO as a strong bet among sell-side analysts on Wall Street. Consider that all 6 analysts polled in the last 3 months rate a Buy on AKAO stock. With a return potential of nearly 66%, the stock’s consensus target price stands at $19.40.

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