What happened
Shares of the small-cap biotech BridgeBio Pharma (BBIO 2.26%) were down by 7.2% on moderate volume as of 1:09 p.m. ET Thursday. The big loss came after JPMorgan Chase released a cautionary note on the biotech's experimental treatment of symptomatic transthyretin amyloidosis cardiomyopathy, or ATTR-CM, known as acoramidis.
ATTR-CM is a rare condition caused by a misfolded protein (transthyretin) accumulating in the pumping chambers of the heart. If left untreated, this heart ailment is often fatal.
Acoramidis is presently in phase 3 testing. BridgeBio previously announced that top-line data from this study should be available in late July.
So what
JPMorgan's team said they view this readout as a "high-risk" event due to the well-documented difficulty in treating this patient population. BridgeBio has estimated this market opportunity at between $10 billion and $15 billion per year, despite entrenched competition from industry heavyweights Pfizer and Alnylam.
Over the last year, BridgeBio has repeatedly surfaced as a possible buyout candidate, thanks in part to its late-stage ATTR-CM asset. Hence, a failure in this setting may spook potential buyers.
That being said, BridgeBio does sport a robust pipeline of other potent value drivers, such as its achondroplasia (short stature) treatment infigratinib. As such, a clinical setback in ATTR-CM wouldn't be the end of the world for the small-cap biotech.
Now what
Is BridgeBio stock a buy on this weakness? I think so. The company's broad pipeline of rare-disease and cancer candidates should provide a surfeit of positive catalysts over the next 24 months.
