Cempra (CEMP) Stock: Tick, Tock, Goes The FDA Clock

Cempra Inc (NASDAQ: CEMP)

Cempra Inc. is essentially all-in at this point in time, with two vitally important PFUDA reviews pending this week for solithromycin, its drug intended to treat community-acquired bacterial pneumonia. We received a trading tool, news alert from Trade Ideas that brought our focus to CEMP.

The FDA is set to render its decision on December 27th for the oral formulation and provide its decision on December 28th for the intravenous method of delivery for the drug.

At Stake For CEMP

CEMP has already taken a severe beating since the early part of November.  At that time the share price was crushed by over 60% when reports emerged that solithromycin may potentially have caused a rise in live enzymes. This unintended reaction in patients was severe enough for investors to come to the conclusion that the drug would not be approved. However, only two days later, the FDA Advisory Committee concluded by a vote of 7-6 that, while the production of live enzymes may be concerning, the benefits of solithromycin outweigh the risks of the treatment.

The results then led to a 13-0 vote by the Antimicrobial Drugs Advisory Committee that believes that substantial evidence existed to warrant approval of the drug based on the substantial efficacy results demonstrated by solithromycin. But, then, to make sure investors were to remain unsure of the fate of the drug, that same committee voted 12-1 that the risk of hepatoxicity with solithromycin had not been adequately defined in the data set.

With votes saying “yes, its great….but….”, investors are in a tizzy over whether to bet for or against approval of the drug. Even with an FDA that appears to have been nudged around as of late in regard to approving medications despite potential drawbacks, CEMP investors appear to be sitting on the fence on this FDA call.

CEMP…Catch A Wave Or Wipe-Out?

While saying that this decision for CEMP is a make-or-break moment may be farfetched, it will certainly have a strong impact in the near term for the stock.

Solithromycin was granted fast track designation back in 2015, and CEMP subsequently filed its NDA in 2016.  The FDA accepted the application in June, which then set up the crucial PFUDA dates.

Whether or not the FDA will be swayed to approve the drug is a coin toss in investors’ minds, regardless of the fact that CEMP may have demonstrated that they might have eliminated many of the negative aspects regarding the problems associated with Ketex.

As of now, though, CEMP is a fluttering stock, moving erratically at a moment’s notice, and may provide an opportunity to both sides of the trade, long or short.

CNA Finance will keep followers appraised of any breaking news on CEMP.

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