GENT $6.00 Gentium shares tumble after co withdraws liver drug
By Shravya Jain
Thu Aug 18, 2011 10:40am EDT
(Reuters) - Shares of Gentium SpA (GENT.O) fell as much as 30 percent on Thursday, a day after it withdrew a marketing application for its experimental treatment for life-threatening complications related to stem cell transplantation.
"We have lost confidence in management's abilities to successfully navigate the regulatory and commercial paths for Defibrotide, the company's sole proprietary drug candidate," ThinkEquity analyst Mani Mohindru wrote in a note and downgraded the company's stock to "sell" from "buy."
Gentium is testing defibrotide as both preventive and acute treatment options for veno-occlusive disease, a condition in which small veins of the liver are blocked, in stem cell transplant patients.
The U.S. Food and Drug Administration raised concerns about the completeness of the datasets for both the treatment and prevention studies.
Mohindru said she had been expecting the issues to be debated by an advisory panel.
"Contrary to our expectations, the clinical deficiencies were apparently so serious, that the FDA did not even want to spend time to review the entire application," she wrote.
However, Wedbush Securities analyst Gregory Wade said he was confident in the drug's ability to get approved both in the United States and Europe and would be an aggressive buyer of the company's shares based on weakness.
He cut the price target on the stock by $2 to $14.
He said the product remained the standard of care both in the United States and Europe and that hasn't changed.
In the first quarter, defibrotide net sales to patients who have unsuccessfully used all alternate treatment options was 3.86 million euros -- 76 percent of total product sales.
"While there may be a bump in the road to approval, it is not really affecting the business of the company in the near-term at least," he said.
The Italian company's shares were trading down 29 percent at $6.22 on Thursday morning on Nasdaq.
(Reporting by Shravya Jain in Bangalore; Editing by Joyjeet Das)
