Achaogen (AKAO) Stock: Falling On Mixed FDA Response

Achaogen Inc AKAO Stock NewsAchaogen Inc (NASDAQ: AKAO) is havinga  rough start to the trading session this morning, and for good reason. The company released news from the FDA surrounding its New Drug Application that led to mixed results from the regulatory agency. Of course, mixed results concerned invesotrs, leading to declines in the value of the stock. Today, we’ll talk about:

  • The NDA results;
  • what we’re seeing from AKAO as a result; and
  • what we’ll be watching for ahead.

AKAO Announces FDA Response To NDA

As mentioned above, Achaogen is having a rough start to the trading session this morning after the FDA provided mixed results with regard to the copany’s New Drug Application (NDA). The application surrounded ZEMDRI™ (plazomicin) as a treatment for two indications, complicated Urinary Tract Infections (cUTI) and Bloodstream infections (BSI).

In the release, AKAO announced that ZEMDRI™ has been approved for one indication and was rejected for the other. While the US FDA has approved the treatment for adults with cUTI, the BSI indication was rejected and the company was provided with a CRL. In the release, the company said that it plans on working with the FDA to determine whether there is a feasible resolution surrounding the BSI indication. Nonetheless, in the CRL regarding this indication, the FDA stated that the CARE study did not provide substantial evidence of efficacy of the treatment for the BSI indication. In a statement, Blake Wise, CEO at AKAO, had the following to offer:

The approval of ZEMDRI marks a significant milestone for Achaogen and we are excited to offer healthcare practitioners a new treatment option for patients with certain serious bacterial infections. ZEMDRI is designed to retain its potent activity in the face of certain difficult-to-treat MDR infections, including CRE and ESBL- producing Enterobacteriaceae… Today’s milestone was made possible by our employees, by patients and investigators involved in our clinical trials, and by BARDA, who contributed significant funding for the development of ZEMDRI. This marks an important step in our commitment to fighting MDR bacteria and we are excited to launch ZEMDRI, a much needed once-daily antibiotic.

What We’re Seeing From The Stock 

In general, when the FDA approves a New Drug Application, we tend to see gains. However, the case of Achaogen this is a bit different. While the FDA did approve the treatment for the cUTI indication investors are clearly upset that the BSI indication was rejected. This can be seen in the declines the stock is seeing in the market this morning. Of course, our partners at Trade Ideas were the first to alert us to the declines. Currently (8:54), AKAO is trading at $10.80 per share after a loss of $1.22 per share or 10.15% thus far today.

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What We’ll Be Watching For Ahead

Moving forward, the CNA Finance team will continue to keep a close eye on AKAO. In particular, we’re interested in following the story surrounding the company’s goal of working with the FDA in regard to the BSI indication. Nonetheless, it’s important to note that the cUTI indication has the potential to yield incredible revenue down the line. So, today’s declines may prove to be an opportunity!

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