What happened

Shares of ChemoCentryx (CCXI) were cratering by 58.3% as of 11:40 a.m. EDT on Friday. The stock also crashed on Tuesday after the U.S. Food and Drug Administration (FDA) released briefing documents for an advisory committee that expressed significant reservations about the company's data for avacopan. Today's huge decline came after that advisory committee's vote on recommending approval for the experimental therapy.

So what

Based on the performance of the biotech stock today, you might have expected that the advisory committee overwhelmingly voted against recommending approval for avacopan. That wasn't the case, though. The committee voted 10-to-8 in favor of approval of the drug in treating anti-neutrophilic cytoplasmic autoantibody (ANCA)-vasculitis, a rare disease that causes small blood vessels to swell. 

One thumb up and another thumb down

Image source: Getty Images.

There were actually multiple votes by the advisory committee. On the question of whether the efficacy data from ChemoCentryx's clinical study supported approval, there was a tie with nine members voting for and nine voting against. The committee also voted 10-to-8 that the safety profile of avacopan was sufficient to support FDA approval.

The FDA doesn't have to follow the recommendation of the advisory committee. Although the agency usually does go along with committee recommendations, it's clear that investors don't expect that to happen this time.

Now what

ChemoCentryx's hopes for avacopan now rest with the FDA. If the agency doesn't approve the drug, it's likely that the company will have to conduct another clinical study before it can refile for approval.