Is It Game Over for Trevena (TRVN) Stock?

On Friday, Trevena (TRVN) announced it received a discouraging Complete Response Letter (CRL) from the FDA for its experimental pain drug, Oliceridine. Importantly, the FDA has requested additional clinical data on QT prolongation and is apparently worried that the submitted safety database is not of adequate size for the proposed dosing. In reaction, TRVN stock fell about 37% to $0.66 since the news broke.

Adding insult to injury, H.C. Wainwright analyst Ed Arce downgraded TRVN from Buy to Hold, while slashing the price target to $0.75 (from $8.00), which implies an 11% downside from current levels. (To watch Ed Arce’s track record, click here)

Arce says he tried to keep positive on the drug, even when it got a negative 7-8 AdCom vote last month. But today, the analyst could no longer keep a half smile:

“…we, like some others, nevertheless believed there remained a chance it could be. Not only did we point to the closely split AdCom vote, but we also viewed two main areas of contention at the meeting as manageable: efficacy vs. morphine (more of a commercial differentiation issue than one of approvability), and a potential claim of lower risk of respiratory depression vs. morphine (largely an issue of labeling). Thus, we are gratified to learn (at least based on Trevena’s press release) that the FDA appears to have put to the side questions of comparative efficacy and safety, and decided on the question of oliceridine’s approvability based on the drug’s own merits,” Arce said.

“At this point, we believe a likely (perhaps optimistic) timeline going forward is an FDA meeting in early 1Q19, followed by (at least) six months to resubmit the NDA (depending on the data and analyses necessary), then six months for FDA review (Class 2 resubmission), leading to a new PDUFA data in 1Q20 and potential commercial launch in mid-2020, following DEA scheduling. In other words, until we receive further clarity on the path forward, we assume the timeline is pushed back at least 15 months or more, which is beyond Trevena’s current cash runway,” the analyst added.

It is yet to be seen how the stock will move from here, but it is not looking so bright. Overall, out of four analysts who have weighed in on the stock in the last three months, only one is bullish, and three are sidelined. The consensus price target stands at $1.92, showing an upside of 195.79%. (See TRVN’s price targets and analyst ratings on TipRanks)

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