Cantor Fitzgerald downgraded Akebia Therapeutics (NASDAQ:AKBA) to “neutral” from “overweight” and slashed its price target to $1 from $6 after the company received a complete response letter in response to the NDA for vadadustat to treat anemia in patients with chronic kidney disease.
Shares of Akebia were quoted at 70 cents, down 12 cents, in early trading on March 31.
The FDA believes the NDA does not support a favorable benefit-risk assessment and noted concerns around safety in the non-dialysis population due to not meeting non-inferiority in major adverse cardiac events. The complete response letter also states that the company can potentially demonstrate favorable risk-benefit with new clinical trials.
“We believe that running further clinical trials will be costly and timely, and we would note the company has competition from GSK, which had two successful Phase 3 studies in dialysis and non-dialysis with their asset, daprodustat,” writes analyst Alethia Young
“We see significant risk to the clinical development pathway for vadadustat, which is the rationale for the downgrade, and we think cash could be become an issue at some point over next 12 months without a significant restructuring,” she added. The company currently has $149.8-million in cash, which is about 85 cents a share.
In light of the reduced confidence in the potential approval of vadadustat given the FDA letter, Ms. Young has decreased her probability of success for the dialysis opportunity to 25% from 75% and maintained 0% for the non-dialysis opportunity.
