WestTexAg12 said:
Ranger222 said:
$AKAO Down 30% on open
Why would this have happened? NDA backed the drug and voted 15-0 in favor of it. Why the major drop?
Tried to explain in my previous post, but the 15-0 vote was in favor of only treatment of plazomicin in urinary tract infections (cUTI). The other vote, 4-11, was against recommending plazomicin in treatment of blood stream infections.
The market already expected a favorable vote in cUTI. Today was all about that 2nd vote for recommendation in BSI. AKAO and plazomicin would have had a moat for treatment in this indication with no competition from other drugs. A favorable vote would have meant a slam dunk for FDA acceptance in this particular indication. After today, that acceptance will be in doubt until the middle-end of June when the FDA will issue its final decision.
Plazomicin will still be approved by the FDA in June for treatment in cUTI. We will be waiting to hear about BSI. Plazomicin will have competition from other drugs in cUTI, but would have been the lone drug of choice for BSI. How much money the company makes from here will all be about how well the drug roles out to market, how well drug representatives pitch the drug to doctors, how many prescriptions the doctors write, etc. There is no guarantee that process goes well. BSI would have been the guarantee. If the company has to fund more trials to prove plazomicin is safe for the BSI indication to get past FDA acceptance, that just means their bottom line is impacted, the wait to become profitable gets longer, and they may have to issue new shares of stock to fund those trials, diluting current owner's shares. That is why the stock dropped after the vote today.
However this could all be premature and the FDA approves for both indications with a clean label and this is all for naught. Will be a long wait till then.
