ChemoCentryx Shares Rise After Unexpected FDA Approval

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Biotechnology stocks

ChemoCentryx

are up more than 60% on Friday after the Food and Drug Administration surprised investors by approving the company’s drug avacopan as a treatment for a rare condition called ANCA-associated vasculitis.

Investors had all but abandoned avacopan.

ChemoCentryx

stock (ticker: CCXI) collapsed in May, when the FDA released backgrounders ahead of an advisory committee meeting that took a very skeptical view of the company’s development agenda, saying it ‘there were “substantial uncertainties” around the design and results of its phase 3 trial on avacopan.

The advisory committee’s view was less harsh, and its vote on whether efficacy data supported drug approval was equally split, nine to nine.

Yet investors have lost heart. The stock closed at $ 48.82 on May 3, the day before the FDA released the briefing materials, and fell to $ 10.46 on May 7, after the advisory committee met.

The shares still had not recovered until Thursday, when the stock closed at $ 19.60.

News of the unexpected approval sent investors back into the stock. At noon on Friday, ChemoCentryx shares were trading at $ 32.23, up 64.5% on the day.

“Today is an important day in the history of ChemoCentryx; the culmination of decades of efforts to bring new hope to patients with this and other debilitating and fatal illnesses, ”CEO Thomas J. Schall said in a statement.

ANCA-associated vasculitis is an autoimmune disease that causes inflammation of blood vessels and can lead to lung and kidney damage, among other symptoms.

Following critical FDA briefing papers and the lukewarm advisory committee meeting, ChemoCentryx updated its avacopan approval request with responses to criticism of its initial filing. In response, the FDA pushed back its schedule for approving or rejecting the drug to October 7.

In a note released Friday, SVB Leerink analyst Joseph Schwartz wrote that the approval came as a surprise.

“We are encouraged to see that the Tavneos [avacopan] the label does not include a black box warning, ”Schwartz wrote. “However, the label recommends that patients get liver function tests before starting treatment, with monitoring if necessary – screening for hepatitis B infection is also recommended before treatment.”

Speaking on an investor call on Friday morning, Schall said the drug would cost between $ 150,000 and $ 200,000 per patient per year.

Write to Josh Nathan-Kazis at [email protected]