The Olympics only come round once every four years (excluding this year’s covid-driven 5-year gap). It’s a momentous occasion for athletes, but one little mistake can lay all the herculean effort and years of preparation in getting to the world’s biggest sporting event to waste.
While not quite having the same dramatic flair, it takes a biotech company years to get a therapy in front of the regulators. By the same token, one misstep can send the company back to the drawing board.
Which in a roundabout way, brings us to Iterum Therapeutics (ITRM). On Monday, the biotech had its own moment of disqualification on the starting line, after the company announced it had received the dreaded CRL (complete response letter) from the FDA for its UTI (urinary tract infection) treatment.
The FDA said that based on the present form of its new drug application (NDA) for oral sulopenem – Iterum’s candidate for the treatment of adult women with uncomplicated urinary tract infections – the regulatory body will not approve the therapy, due to undisclosed deficiencies in the NDA. The FDA also said it needed additional data and recommended the company carry out at least one extra well-controlled clinical study of the drug.
H.C. Wainwright’s Ed Arce is surprised by this turn of events.
“Admittedly, we did not expect nor surmise that—with less than four weeks before the PDUFA—the ‘deficiencies’ could entail a new clinical trial, which pushes the potential timeline to market back substantially,” the analyst said. “In a further surprise to us, the FDA also recommends that Iterum conduct further pre-clinical work to determine the optimal dosing regimen.”
Iterum plans to discuss the path forward for the treatment with the FDA, in a meeting most likely to take place toward the end of Q3. If another study is required, Arce thinks the drug’s approval will be pushed back by at least another two years to 3Q23. On the plus side, the analyst notes the company has enough cash to survive until then, which should allow it to “reach top-line data and possibly NDA re-submission.”
However, in the meantime, “amidst a major delay to sulopenem’s potential approval,” Arce downgraded Iterum’s rating from Buy to Neutral (i.e., Hold), having no fixed price target for the shares. (To watch Arce’s track record, click here)
Both other analysts to have recently reviewed ITRM’s prospects are on the same page, also recommending to Hold, therefore providing the stock with a Hold consensus rating. Interestingly, however, based on one’s optimistic outlook, the stock’s average price target comes in at $2, suggesting one-year gains of a hefty 169%. (See ITRM stock analysis on TipRanks)
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Disclaimer: The opinions expressed in this article are solely those of the featured analyst. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.