Please ensure Javascript is enabled for purposes of website accessibility

Why ChemoCentryx Stock Crashed Today

By Keith Speights - May 4, 2021 at 4:06PM

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's briefing documents for an advisory committee don't appear to bode well for avacopan's chances of approval.

What happened

Shares of ChemoCentryx (CCXI 7.99%) were crashing 46.5% lower as of 3:06 p.m. EDT on Tuesday. The huge decline came after the U.S. Food and Drug Administration (FDA) released briefing documents for an advisory committee scheduled to meet on Thursday to review the approval application for avacopan.

So what

As you might have guessed from the collapse of the biotech stock today, the FDA's briefing documents didn't look very good for ChemoCentryx. Instead, the documents raised significant doubts about the prospects for avacopan to win approval in treating anti-neutrophilic cytoplasmic autoantibody (ANCA)-vasculitis, an autoimmune disease that causes small blood vessels to swell.

Man wearing coat and tie holding blocks in his hand spelling FDA

Image source: Getty Images.

The FDA stated in the briefing documents that ChemoCentryx's study design on which its regulatory filing is based "raise questions about the interpretability of the data to define a clinically meaningful benefit of avacopan." That basically means that the agency doesn't put much stock in the clinical results for the experimental drug.

This shouldn't have been much of a surprise to ChemoCentryx, though. The FDA stated that it previously informed the company about many of its concerns about the design of the late-stage study for avacopan.

Now what

It's possible that the Arthritis Advisory Committee will still view ChemoCentryx's filing for avacopan in a positive light. That doesn't seem likely at this point, though, considering the strong language the FDA included in its briefing documents.

Even if the advisory committee recommends approval, the agency doesn't have to go along with that recommendation. ChemoCentryx could very well have to conduct another late-stage study to address the FDA's concerns.

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

ChemoCentryx, Inc. Stock Quote
ChemoCentryx, Inc.
CCXI
$26.76 (7.99%) $1.98

*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
311%
 
S&P 500 Returns
110%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 07/01/2022.

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.