Shares of Reata Pharmaceuticals (RETA -0.25%) got hammered in early trading Thursday, plunging as much as 43%. As of 11:18 a.m. ET, the stock was still down 42.7%.
The catalyst that sent the clinical-stage biopharmaceutical company reeling was an adverse opinion by a Food and Drug Administration (FDA) advisory panel.
Trading in Reata stock was halted on Wednesday as the FDA's Cardiovascular and Renal Drugs Advisory Committee met to discuss the fate of bardoxolone methyl, the company's drug candidate designed to treat chronic kidney disease. After reviewing the submission, the committee decided in a 13-0 vote that bardoxolone simply wasn't effective.
More specifically, the committee said the data provided from the drug candidate's phase 3 clinical trial showed that bardoxolone didn't prove effective in slowing the progression of kidney disease caused by Alport syndrome, while also concluding that the benefits of taking the drug didn't outweigh the risks.
The outcome wasn't particularly surprising, after Reata Pharmaceuticals stock plunged 38% earlier this week when the briefing document posted on the FDA's website suggested the committee had significant concerns regarding the safety and efficacy of bardoxolone. The questions suggested a problem with the phase 3 trial and whether it "was adequately designed to assess for an effect on the progression of chronic kidney disease in patients with Alport syndrome."
It's important to note that the vote by the committee isn't the last word. The FDA is slated to make a final decision regarding bardoxolone on Feb. 25, 2022. The agency isn't bound by the decision of the advisory committee, but it does take its recommendations into account before making its decision.
Still, with the committee voting unanimously against bardoxolone, the hopes of its eventual approval dimmed significantly this week. Investors found this a tough pill to swallow since bardoxolone methyl is one of Reata Pharmaceuticals' two most-advanced clinical trial candidates, and the company's prospects are now quite uncertain.