Please ensure Javascript is enabled for purposes of website accessibility

Here's Why Tricida Shares Plummeted Today

By Brian Orelli, PhD - Updated Feb 26, 2021 at 2:15PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The FDA denied the biotech's appeal, but there's still a path forward for its drug.

What happened

Shares of Tricida (TCDA -0.41%) are down 30% at 1:33 p.m. EST today after the Food and Drug Administration denied the company's appeal of a complete response letter (CRL) that the agency issued for Tricida's marketing application for veverimer as a treatment for chronic kidney disease.

So what

A CRL, like the one Tricida received in August 2020, is essentially a rejection letter from the FDA with instructions on what data the agency would need to see for the drug to eventually get approved. Tricida was trying to get veverimer approved under the accelerated approval pathway, which uses surrogate endpoints, such as biomarkers, to predict clinical outcomes. In Tricida's case, it wanted to use change in serum bicarbonate levels to predict future kidney function in patients with chronic kidney disease.

Rather than address the issues and resubmit the marketing application with more clinical data, which would take awhile, Tricida appealed the FDA's decision, arguing that the change in serum bicarbonate seen in the one clinical trial run by the company was sufficient for accelerated approval.

Not surprisingly, the agency stuck with its belief that the magnitude of change in serum bicarbonate wasn't likely to predict clinical benefit in patients with chronic kidney disease. The agency is also concerned that a majority of the sites for the clinical trial were in Eastern Europe, where the different diets and treatments prescribed to patients might make the results less applicable to the U.S. patient population.

Doctor showing a report to a patient

Image source: Getty Images.

Now what

While the FDA's denial of the appeal is certainly bad news for Tricida, the company still has a pathway to gain approval for veverimer.

Tricida is currently running a second clinical trial, the Valor-CKD study, which theoretically could produce the data on changes in serum bicarbonate that the FDA wants. But Tricida warned that the data might not be strong enough for the agency to give veverimer an accelerated approval.

Fortunately, the Valor-CKD study is also measuring the function of patients' kidneys, so the results could be used for a full approval. Unfortunately for Tricida, it takes awhile for patients with chronic kidney disease to progress, so a final readout isn't expected until the first half of 2024. If veverimer works really well, the clinical trial could produce data during one of two interim readouts expected in the second half of 2021 and the middle of 2022.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Tricida, Inc. Stock Quote
Tricida, Inc.
TCDA
$9.64 (-0.41%) $0.04

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
316%
 
S&P 500 Returns
112%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 07/02/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.