Analysts downgrade Correvio Pharma as FDA Adcom rejects Brinavess

Analysts for H.C. Wainwright, Mackie Research and Echelon Wealth Partners downgraded Correvio Pharma (NASDAQ:CORV) after the FDA Cardiovascular and Renal Drugs Advisory Committee voted 11-2 against recommending approval of Correvio’s Brinavess for the rapid conversion of recent onset atrial fibrillation. The stock closed at $1.40 on Dec. 10.

HCW analyst Swayampakula Ramakanth writes that the FDA panel could not define a specific patient population in which Brinavess would yield a positive benefit/risk ratio. In addition, a majority of the panel members believed that the data from the SPECTRUM study inadequately alleviates the safety concerns posed by the FDA.

“Taking into account the negative panel vote and the FDA’s overall negative opinion in the briefing document, we believe Brinavess is unlikely to receive the U.S. approval based on its current NDA data package,” he added.

Mr. Ramakanth downgraded the stock to “neutral” from “buy” without a price target.

Analyst André Uddin of Mackie Research downgraded Correvio to “hold” from “speculative buy” and lowered his price target to $1.60 from $3.70.

He said Correvio currently has a cash runway into mid-2020 and $44-million of debt due in March 2022. “We are assuming Correvio would require several financings down the road to strengthen its balance sheet.”

Mr. Ramakanth said Trevyent is Correvio’s most valuable asset besides Brinavess, which has been marketed in Europe for rapid conversion of recent onset atrial fibrillation to sinus rhythm, or cardioconversion. Correvio plans to file Trevyent with the European Medicines Agency in mid-2020. The FDA has accepted United Therapeutics’ NDA filing for Trevyent in September 2019 and assigned a PDUFA date of April 27, 2020.

“If the company could overcome the near-term financial overhang, the potential U.S. approval of Trevyent would make us more constructive on the stock,” Mr. Ramakanth added.

Doug Loe, an analyst with Echelon, downgraded Correvio to “hold” from “buy” at least until “we see evidence of revenue recovery after soft third quarter 2019 financial data were reported last month and until we see clear evidence that Correvio’s existing Europe-focused acute care portfolio is on a revenue growth trajectory that could achieve EBITDA break-even in the next year or two.” Mr. Loe also lowered his price target to $1.75 from $5.50.

“We believe the probability that Correvio will invest in new Phase 3 testing to more precisely define target patient population is extremely low and thus that no future U.S.-based clinical/regulatory activities for the drug will be forthcoming,” he added.