For biotech stocks like Avidity Biosciences (NASDAQ:RNA), getting drugs through the FDA is their bread and butter. Failure in the lab often leads to failure in the market. However, Avidity’s failure seems less objective than it was perceived. That failure cost Avidity roughly 14% of its stock price in Friday’s trading.
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The drug in question for Avidity was known as AOC 1001, a treatment targeting myotonic dystrophy type 1. Avidity released its top-line phase 1 / 2 data, built around a double-blind study with a placebo for single and multiple doses. The testing didn’t turn out that badly; there was an improvement on several fronts, including strength and mobility, and further improvements were seen at larger doses. Plus, there was even a solid safety and tolerability report with the drug.
However, what actually sent Avidity into its tailspin was unclear. AOC 1001 turned in a decent performance, and several other signs of life came out of the company. It recently landed Fast Track designation for its Duchenne muscular dystrophy treatment known as AOC 1044. The latest study on AOC 1001 should be complete by the end of the year. It may be just that things are taking too long for investors’ liking, but that’s the nature of things with most biotech issues.
Most analysts certainly are unfazed, however. With five Buy ratings and one Hold, Avidity Biosciences stock is considered a Strong Buy by analyst consensus. Further, with an average price target of $36.50, RNA stock offers investors an upside potential of 194.35%.
