Why Achaogen Shares Are Getting Crushed

Achaogen Inc. (NASDAQ: AKAO) saw its shares crumble early on Thursday after the U.S. Food and Drug Administration (FDA) Antimicrobial Drugs Advisory Committee voted on its drug plazomicin. As we have said before, the FDA has the potential to make or break biopharma companies, and in this case Achaogen is feeling the burn.

For some quick background: Plazomicin is an aminoglycoside that was developed to treat serious bacterial infections due to multidrug resistant gram-negative bacteria including carbapenem-resistant Enterobacteriaceae. It has been evaluated in two Phase 3 clinical trials, EPIC and CARE.

The FDA’s committee voted on the two points for Advisory Committee consideration as follows:

1. Has the applicant provided substantial evidence of the safety and effectiveness of plazomicin for the treatment of complicated urinary tract infections?

Result: (15-0-0) There were 15 yes votes and zero no votes. No members of the panel abstained.

2. Has the applicant provided substantial evidence of the safety and effectiveness of plazomicin for the treatment of bloodstream infections in patients with limited or no treatment options?

Result: (4-11-0) There were four yes votes and 11 no votes. No members of the panel abstained.

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It’s worth pointing out that the FDA is not bound by the committee’s votes but takes its input into consideration when reviewing marketing applications. Plazomicin has a Prescription Drug User Fee Act (PDUFA) date of June 25, 2018.

If the FDA approves plazomicin by this target action date, Achaogen expects to launch plazomicin in the U.S. soon thereafter.

Blake Wise, Achaogen’s CEO, commented:

We are encouraged by the Committee’s unanimous vote in favor of plazomicin for complicated urinary tract infections (cUTI). The discussion underscored the real-world challenges that healthcare providers face every day given limited or inadequate treatment options for certain pathogens. Regarding bloodstream infections, the Limited-Population Antibacterial Drug pathway, or LPAD, is a novel approach that enables the FDA to consider the benefits and risks for the sickest patients who have few or no available treatment options, and to approve antibiotics like plazomicin that we believe, have the potential to address these limited patient populations.

Shares of Achaogen were last seen down 17% at $12.21, with a consensus analyst price target of $21.56 and a 52-week range of $9.83 to $27.49. The stock was down as much as 31% earlier in the session.

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