Normally, a win at the FDA means big things for pharmaceutical companies. So why was Acer Therapeutics (NASDAQ:ACER) down so far in trading today? The company saw a small rally in after-hours trading, but the conditions that came with its FDA win weren’t exactly great news.
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Acer took home a win for its drug Olpruva, or sodium phenylbutyrate. Olpruva targets disorders involving urea cycles. These include anything from carbamylphosphate deficiencies to argininosuccinic acid synthetase deficiencies. These are also considered rare diseases, so while Olprava won’t be treating many patients, they’ll likely be glad to see Olpruva exists.
However, the approval comes with a potentially troubling reward, of sorts. Olpruva’s approval allows Acer the option to take on a loan term agreement with Marathon Asset Management affiliates valued at $42.5 million. Such a loan is sufficent, reports note, to fund Acer’s operations through most of 2023. It also seems likely Acer will take the loan, after word from founder and CEO Chris Schelling. Schelling noted that the loan will allow Acer to “…advance our pipeline of investigational product candidates.”.
Concerns over the new loan sent Acer Therapeutics down, and kept them there. Just five days prior, the company was trading at around $4 per share, and stayed there until December 23. That send the company plunging to its current level, about half what it was at its height just ahead of the Christmas holiday.
