Recro Pharma (NASDAQ:REPH) announced today that its lead compound, IV Meloxicam, received a CRL from the FDA, which is a nice way of saying that it was rejected. IV Meloxicam is a cyclo-oxygenase 2 (COX-2) inhibitor, which works to relieve moderate to severe pain. IV meloxicam has consistently demonstrated the ability to provide durable pain relief, alongside a favorable safety and tolerability profile, in a range of clinical studies.
The CRL stated that although the outcome of the pivotal phase III trials demonstrated statistically significant outcomes on the primary endpoints, the FDA is unable to approve the application in its current form. The CRL states that data from ad hoc analyses and selective secondary endpoints suggest that the analgesic effect does not meet the expectations of the FDA. In addition, the CRL raised CMC related questions on extractable and leachable data provided in the NDA.
Given the news, it isn’t hard to figure out why shares are being mauled today.
Here are the comments that CEO Gerri Henwood had to share with investors related to the rejection: “We are extremely disappointed for patients and providers who are looking for a non-opioid alternative for relief of pain. We stand behind the body of evidence included in our NDA and are committed to further discussions with FDA in order to bring this important medicine to patients. We intend to request a meeting with the FDA as soon as possible to discuss the points raised in the CRL and look forward to working with the Agency to find solutions that can contribute to solving the current opioid public healthcare problem.”
Recro has a lot of disappointed bulls out today as the stock plummets over 50%. According to TipRanks, out of 5 analysts polled in the last 3 months, all 5 rate a Buy on Recro stock. The 12-month average price target stands at $16.25, marking a nearly 187% upside from where the stock is currently trading.
Today’s drop might represent a buying opportunity for investors who still believe in IV Meloxicam’s long-term potential and are willing to wait while the story plays itself out. However, Recro remains a high-risk company, and if you’re not a risk taker you may want to monitor its progress from the sidelines.