Savient Pharma (SVNT) Lower On FDA Refusal of Gout Treatment, But Analysts Still Positive
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Shares Savient Pharmaceuticals, Inc. (Nasdaq: SVNT) are 20% lower today after the FDA issued a complete response letter stating that it can not approve gout treatment KRYSTEXXA at this time.
While investors are expressing their disappointment with the news, a number of Wall Street analysts are out defending the shares, saying the issues cited by the FDA are manageable.
Leerink Swann said, We are encouraged by the benign nature of the complete response, and believe that these issues can be resolved on or potentially ahead of management's guidance for BLA resubmission in early 2010. Reiterate Outperform, lowering valuation to $15 from $18 to account for rightward shift in launch.
Collins Stewart said, "Our manufacturing consultant, who has participated in the production of large-scale PEGylated products, noted that the manufacturing concerns cited in the complete response (CR) letter are straightforward to resolve. SVNT is reverting back to the P3 manufacturing process (ABI available by early-Oct) and the BTG observations are minor given they were previously to be addressed in the post-approval setting. CMC aside, we are highly encouraged that the FDA has proposed a benign REMS that is limited to patient/physician monitoring and a broad filed a BLA label (inadequate responders to allopurinol or Uloric). Importantly, we believe partnership/acquisition discussions should continue given the clarity on the label and REMS and a potentially broader treatment population." The firm reiterates their Buy rating and $21 price target.
Wedbush Morgan said, Complete response letter citing five addressable areas, namely in manufacturing and risk management, issued. All deficiencies manageable and addressable without new studies, in our view. Reit Outperform rating, but cuts price target from $15 to $12.
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