|Savient shares fall over gout drug safety concerns|
Monday October 27, 6:17 pm ET
Savient Pharmaceuticals shares drop as Wall Street urges caution on gout drug candidate
NEW YORK (AP) -- Shares of Savient Pharmaceuticals plunged Monday as Wall Street urged caution over the safety profile of the drug developer's candidate for gout treatment Puricase.
The stock plunged $8.51, or 73.5 percent, to $3.07. Earlier in the session, shares fell to $2.80, their lowest point in more than three years.
On Monday, Savient reported more late-stage study data on Puricase, reinforcing its effectiveness in prior results. If approved, the drug would be administered intravenously, with the goal of removing uric acid from the blood. Gout is a severe inflammation caused by the buildup of uric acid, which in turn causes pain and swollen joints.
Despite the positive results, several analysts said they remain cautious on the drug because of cardiovascular side effects seen during the development program. Savient maintains that the drug has an acceptable safety and tolerability profile.
"We believe the high rates of cardiovascular adverse events, discontinuations due to infusion reactions, and anaphylaxis like reactions complicate the risk-reward profile of the drug," said Cowen and Co. analyst Rachel McMinn, in a note to investors. "Although admittedly the refractory patient population it aims to treat is extremely ill."
The company has previously reported seven patient deaths in the clinical program, of which three were attributed to heart-related issues. One of those patients died of renal failure after voluntarily withdrawing from dialysis and Savient does not believe the deaths are drug related. Meanwhile, another five patients on Puricase had experienced heart issues, but continued to take the drug and continued treatment successfully.
"The emerging safety profile of long-term pegloticase (Puricase) therapy is consistent with that observed in the six-month double-blind studies, with no apparent new safety concerns related to long-term exposure," Savient said in a statement.
Cowen's McMinn, meanwhile, downgraded the stock to "Underperform" from "Outperform", citing a more safety-conscious Food and Drug Administration and a possible overestimation of the market for the drug. She said there is a possibility the drug could be reserved for only patients with severe forms of gout.
Meanwhile, Jefferies & Co. analyst Eun Yang reaffirmed a "Hold" rating on the stock, also citing caution over possible safety issues and their effect on the approval timeline.
"While effective in treatment-failure gout, side effects profile does not appear favorable for Puricase," he said, in a note to investors.
The company's guidance for regulatory approval in the first half of 2009 may be too aggressive, he said, and said the second half of 2009 is more likely.
Oppenheimer & Co. analyst John Newman reaffirmed a "Perform" rating on the stock, also urging caution.
The company will present additional safety data Tuesday at the American College of Rheumatology's 72nd annual meeting in San Francisco.