Savient Shares Fall After Drugmaker Sets Stock Sale
Savient Pharmaceuticals Inc. (SVNT) shares fell 12 percent after a public stock offering announced today raised investors’ concerns about the company’s prospects for finding a partner for its gout drug.
Savient shares fell $1.78 to $13.29 in Nasdaq Stock Market composite trading at 4 p.m. New York time. It was the biggest percentage decline since shares fell 18 percent on Aug. 3.
Savient failed to win U.S. approval for its gout drug Krystexxa on Aug. 2, when the Food and Drug Administration raised issues about the medicine, including the manufacturing process and guidelines for evaluating the drug’s safety and efficacy. Savient, based in East Brunswick, New Jersey, said in a filing today that it plans to offer 4 million shares at an offering price yet to be determined. The offering could raise more than $50 million at current prices.
“People are wondering if a deal to partner the drug is less likely,” Joseph Schwartz, a New York-based analyst for Leerink Swann & Co. said in an interview. If approved, the drug could generate $500 million in U.S. sales, he said.
The offering also dilutes the value of existing shares by about 7 percent, he said.
Savient will use money from the offering to continue efforts to seek U.S. approval for the gout drug and “to develop a program of regulatory filings and review” in other countries, the company said in a statement.
The company said on Sept. 16 that it met with regulators and “believes that the FDA supports its approach to resolve all issues” for Krystexxa and that it did not expect to have to conduct further clinical studies.
To contact the editor responsible for this story: Reg Gale at Rgale5@bloomberg.net