ANDS – Here’s the AP newswire
for archival purposes. There are
manifold understatements here,
including the one you cited by
Jennifer Chao.
>>
Anadys Pharma Dives on Halted Study
Monday June 26, 2:08 pm ET
by Damian J. Troise
AP Business Writer
Anadys Pharmaceuticals Shares Plummet After Halting Drug Study Over Possible Safety Issues
SAN DIEGO (AP) -- Shares of Anadys Pharmaceuticals Inc. lost nearly half their value in midday trading Monday after the company said it suspended an early-stage study on its hepatitis C treatment candidate over safety concerns.
Shares shed $3.24, or 48.4 percent, slumping to $3.45. The stock tumbled as low as $2.98 at one point, setting a record low for the drug developer with trading volume surging to 20 times its average. The stock's all-time high of $16.60 came March 30. [I.e. it’s now down almost 80% in less then three months.]
The company halted a Phase 1b clinical trial of ANA975 involving 17 people, pending analysis from the drug's preclinical toxicology studies in animals. In a statement, the company said it has not seen any adverse effects in the clinical trials on people, but analysis of the preliminary study showed new observations "consistent with intense immune stimulation in animals."
The company, which is collaborating with Novartis on the drug, said it will work with the Swiss pharmaceutical company to determine the candidate's future. It did not provide any more detail on the preclinical findings. "We continue to believe that ANA975 is an effective immunomodulator and therefore a potentially promising agent for patients infected with hepatitis C," said President and Chief Executive Dr. Kleanthis G. Xanthopoulos, in a statement.
The move prompted a series of analyst downgrades, with one citing that the developmental Hepatitis C drug is no longer a viable candidate.
Think Equity Partners LLC analyst Andrew McDonald reaffirmed a "Sell" rating and halved his price target to $3.50 from $7, citing the lack of "viable clinical candidates."
Another negative event sparking the downgrade is the recent announcement by Xanthopoulos that he will leave the company he founded by year's end to work for a venture capital firm. While McDonald does not think the two pieces of news are connected, they don't bode well for the company's outlook. "We believe these two key negative events remove any compelling reason to place any technical value in this company," he wrote.
The company does have another candidate, ANA380, in a mid-stage study for hepatitis B, though McDonald does not view it as a future prospect. [I would like to know the reason for this opinion. ANA380 is awaiting the start of phase-2b, and NVS holds an option to license it.] Anadys focuses on developing treatments, based on molecular therapeutics, for hepatitis.
Stifel Nicolaus analyst Edward H. Nash downgraded the stock to "Sell" from "Buy," based on the study's suspension. "In our opinion, any halting of a trial this early, especially for a lead program, is highly negative," he wrote in a note to investors. The majority of his outlook for the company was based on the hepatitis C program.
Deutsche Bank analyst Jennifer Chao downgraded the stock from "Buy" to "Sell" with a new price target of $3.35 from $18, citing the news and lack of further information on the preclinical results. Also cited is the recent resignation announcement by Xanthopoulos."While management explicitly states no knowledge of these preclinical toxicity data, timing of these events is likely to be viewed skeptically," she wrote in a note to investors.
Needham & Co. analyst George Fulop downgraded the stock to "Hold" from "Buy" and did not set a price target. He cited the partnership with Novartis, potentially worth $570 million, as proof of concept for the compound with ANA975 and in turn the drug's potential in the market. But the news "will weigh" on the stock price, as will the resignation of Xanthopoulos and partner Novartis' decision to in-license a possible future competitor to Anadys' hepatitis C treatment. But, Fulop wrote, Novartis has said that decision doesn't reflect the future of the drug, rather it reflects a move to develop a hepatitis treatment strategy where a mix of drugs are used in conjunction.
Other downgrades Monday include Piper Jaffray moving the stock to "Underperform" from "Outperform," Montgomery & Co. moving the stock to "Hold" from "Buy" and JMP Securities downgrading from "Strong Buy" to "Market Perform."
Shares of Switzerland-based Novartis AG inched up 23 cents to $52.86 on the New York Stock Exchange. [NVS is the Rock of Gibraltar!]
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