Needham Remains Bullish on Achaogen (AKAO) Stock Despite FDA AdCom Setback


It’s a short and dramatic plunge for Achaogen (NASDAQ:AKAO). Today, the drug maker’s shares lost 25% of their value following the news that the FDA’s Advisory Committee review of AKAO’s application for plazomicin, resulted in a unanimous vote of 4-11 against the inclusion of Bloodstream infections (BSI) indication in the label. To the company’s credit, the committee has voted 15-0 in favor of approval of plazomicin for complicated Urinary Tract Infections (cUTI),

Needham analyst Alan Carr commented, “Ironically, as many committee members admitted, plazomicin will be used in patients with BSI. Our commercial expectations for the drug are therefore unch. Just like Avycaz and Vaborbactam, plazomicin was developed with a specific pathogen in mind (Carbapenem Resistant Enterobacteriaceae [CRE]), not an infection site (e.g. cUTI or BSI). The two other antibiotics developed to address CRE (Avycaz and Vaborbactam) were also launched without BSI in the label. Importantly, these drugs are instead used by physicians primarily on the basis of strength of microbiology data. We note that plazomicin is still backed by impressive and differentiated microbiology data and the strongest clinical data set in CRE (CARE trial). Furthermore, it will be a unique non-beta lactamase inhibitor option.”

Net net, Carr reiterates a Buy rating on Achaogen shares, with a price target of $20. (To watch Carr’s track record, click here)

The Street largely seems to echo Carr’s positive sentiment, considering TipRanks analytics showcase AKAO as a Strong Buy. Out of 6 analysts polled in the last 3 months, all 6 are bullish on Achaogen stock. With a potential upside of 75%, the stock’s consensus target price stands at $19.40.

Achaogen is a late-stage biopharmaceutical company passionately committed to the discovery, development, and commercialization of innovative antibacterial treatments for MDR gram-negative infections. Achaogen is developing plazomicin, its lead product candidate, for the treatment of serious bacterial infections due to MDR Enterobacteriaceae, including carbapenem-resistant Enterobacteriaceae. 

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