Aimmune Therapeutics Inc. (NASDAQ: AIMT) shares dipped on Monday after the Allergenic Products Advisory Committee (APAC) convened by the U.S. Food and Drug Administration (FDA) voted to support the use of AR101 (Palforzia) in children and teens with peanut allergy.

Despite this downturn, Wedbush reiterated an Outperform rating with a $79 price target, implying an upside of 220% from the most recent closing price of $24.67.

In terms of the FDA approval, the APAC voted seven to two that the efficacy data and eight to one that the safety data, in conjunction with additional safeguards, are adequate to support the use of Palforzia. Overall, the APAC reviewed the benefits observed in Palforzia clinical studies and acknowledged the desperate need for new treatment options for peanut allergic patients.

The APAC committee mostly agreed that Palforzia demonstrated a very positive benefit-risk profile and the outcomes of studies align with the patient’s goal of therapy. Previously Palforzia met the pre-specified endpoint in the Phase 3 Palisade trial.

Some panelists agreed that the safety data in conjunction with a Risk Evaluation and Mitigation Strategy (REMS) support the use of Palforzia but pointed out elevated adverse effects in the treatment group and a need for long-term follow-up of patients who discontinued Palforzia treatment and greater diversity in clinical trials.

Management commented that all allergenic prescription products have a Black Box warning, and it does not anticipate a REMS plan to impact potential U.S. launch. The firm anticipates a decision on the REMS program at approval (January 2020 for the United States and mid-2020 for European Union). As a result, Wedbush projects Palforzia could achieve over $1.5 billion in annual sales worldwide starting in 2023.

Shares of Aimmune traded down about 4% early Monday to $23.66, in a 52-week range of $16.95 to $36.12. The consensus price target is $46.60.

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