Shares in the drugmaker plummeted Wednesday after a clinical trial of its treatment for angina showed mixed results
CV Therapeutics' (CVTX) main drug, Ranexa, can only be used as a last-ditch treatment for coronary problems because of concerns that it might cause irregular heartbeats. So when the drug-maker on March 6 announced mixed results from a trial designed to evaluate Ranexa's safety and efficacy, investors sold the stock the next day.
The study had involved about 6,500 patients who suffered from acute coronary syndrome. Within 48 hours of the onset of angina, a condition marked by repeated and sometimes unpredictable attacks of chest pain, patients received either Ranexa or a placebo.
Much was at stake for CV. The Food and Drug Administration had approved Ranexa in January, 2006 as the second therapy to try on angina patients that haven't responded to other drugs. But with proof that Ranexa does not cause higher deaths or other adverse events, the drug could still receive approval as the first treatment to give patients with chronic angina, according to Morningstar. If Ranexa showed additional efficacy, the FDA could approve it for acute coronary syndrome, Morningstar said Dec. 13.
Unfortunately for CV, the recent study didn't end up proving Ranexa's efficacy. But at least it showed no adverse trend in death or irregular heart rhythms in patients who used the drug. The Palo Alto company "believes that the data could support expansion of the existing Ranexa" as the first treatment to give to patients with angina, according to a press release late March 6.
Investors focused on the negative and sold the stock 26.8% to $9.00 per share after midday on the Nasdaq Mar. 7.
But Needham & Co. saw an opportunity in the cheapening price and reiterated its buy opinion on the stock. "We were encouraged to learn that Ranexa did meet a key safety endpoint," analyst Mark Monane said in a Mar. 7 research note. The newly released trial data may alleviate safety concerns and provide impetus for increased physician use of Ranexa, as well as open the door to potential partnership opportunities that will lead to the drug's further development in the market, according to Manone.
The analyst estimates that the results may allow for the expansion of Ranexa's target market to 9 million Americans from the 30,000 patients currently being treated. (Needham expects to soon receive compensation for investment banking services rendered to the company, among other things.)