What happened

Shares of Aimmune Therapeutics (NASDAQ:AIMT) fell 7% on Thursday after the Institute for Clinical and Economic Review (ICER) issued a report pointing out that patients in Aimmune's clinical trials testing its peanut-allergy desensitization treatment, AR101, had allergic reactions requiring epinephrine. Given the side effect, the institute questioned the benefit of treatment compared to just avoiding peanuts.

So what

The increase in adverse events in patients taking AR101 isn't new news, and Aimmune Therapeutics pointed out that ICER didn't incorporate data on long-term outcomes and quality-of-life data in its report, which it believes pushes the risk-benefit analysis in favor of using the treatment.

The cost-effectiveness watchdog estimates the value of the fair-value-based price benchmark for AR101 is in the range of $4,800 to $7,200 per year, which is actually higher than the $4,200 per year that analysts have estimated Aimmune might charge. The company hasn't disclosed its planned cost for the drug, which is under review by the Food and Drug Administration (FDA), with a decision expected in late January 2020.

Aimmune leapfrogged DBV Technologies (NASDAQ:DBVT) when the latter had to withdraw its marketing application for Viaskin Peanut because it lacked some data related to manufacturing and quality of control of the compound. Viaskin Peanut was also covered in the ICER report, but DBV's stock fell less than 1% on Thursday, even though ICER said the fair-value-based price benchmark for its drug was a more modest $3,000 to $4,500 per year.

Boy sticking his hand out refusing a bowl of peanuts.

Image source: Getty Images.

Now what

ICER doesn't hold any real power. While insurers may take the institute's view into consideration, they'll ultimately make their own decisions about the value proposition for AR101 once it's approved and Aimmune releases the price for the drug.

The institute's report highlights the uncertainty with launching a drug into a new market. However, that uncertainty existed before the report, so it's hard to see how today's share-price decline is really justified.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.