Shares of Aquestive Therapeutics (AQST) opened the week in the worst possible way, cratering 42% over the past two trading sessions.
The sharp drop came following Aquestive’s announcement it had received a CRL (complete response letter) from the FDA for its new drug application (NDA) for Libervant Buccal Film for management of seizure clusters.
The FDA is concerned that in the study submitted along with the marketing application, a lower drug exposure level than needed was exhibited by certain weight groups. Otherwise, there were no other safety concerns raised in the CRL.
Despite the setback, Aquestive does not consider this a major issue and plans on meeting the FDA over the coming weeks. The company will provide more information on PK modeling that shows that adjusting the dose will result in the desired exposure levels. Since the FDA did not request any additional clinical studies in the CRL, Aquestive will request a two-month review instead of the standard 6-month review.
Aquestive’s confidence in a turnaround receives H.C. Wainwright analyst Ram Selvaraju’s support. Selvaraju also does not consider the CRL “an insurmountable obstacle to ultimate approval.” The 5-star analyst anticipates a new PDUFA date will be set for some time in 1H21.
Selvaraju said, “In our view, Libervant should still be approvable and we therefore expect the introduction of the product into the U.S. market next year. While certain sales force expansion activities are likely to be pushed into 2021, we do not expect Aquestive to face substantial additional hurdles regarding the timely establishment of sales and marketing infrastructure to support the commercialization of Libervant.”
Overall, Selvaraju keeps a buy rating on AQST share, although his price target gets a slight trim, reduced from $15 to $14. Nevertheless, there’s still massive upside of 217% from current levels. (To watch Selvaraju’s track record, click here)
Overall, the CRL has done nothing to dampen the Street’s expectations. Aquestive has a Strong Buy consensus rating based on Buys only – 5, as it happens. The average price target is even slightly higher than Selvaraju’s and at $14.83, implies upside of 236% could be in the cards over the next 12 months. (See Aquestive stock analysis on TipRanks)
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