BridgeBio Pharma was rising Tuesday following the stock’s worst trading day, as retail investors rallied behind the shares despite a flurry of price cuts from analysts.
BBIO) stock plunged more than 70% Monday after the pharmaceutical company said a Phase 3 study of its acoramidis for the treatment of symptomatic transthyretin (TTR) amyloid cardiomyopathy (ATTR-CM), a cause of heart failure in older adults, failed to meet its primary endpoint at month 12.
But the shares were rising 15.2% to $13.11 on Tuesday, as mentions of the company on Stocktwits, a social media platform for investors, increased. The message volume relating to the stock was up 250.71% Tuesday, as investor sentiment increased 7.4%, according to Stocktwits.
The stock took a hit Monday, tumbling 71.3% to $11.64, down from $40.62 when the market closed last week. Shares have dropped more than 80% this year.
The study’s findings on acoramidis also prompted a series of price target slashes. Raymond James analyst Dane Leone cut his target price to $17, down from $84. Mizuho Securities’ Salim Syed reduce the target to $25 from $86, and H.C. Wainwright & Co. analysts cut their price to $24 from $88.
BridgeBio said the decline observed in participants in both arms of the study were similar to expected declines in healthy elderly adults. The declines were also less than declines in previously untreated participants reviewed by the company. In the placebo group, the drop was more than 70% lower than the decline in the group taking the drug.
For Raghuram Selvaraju, an analyst at H.C. Wainwright, Monday’s results indicated that the probability that the drug would be approved by regulators was slim, about 10%. Selvaraju’s previous approval probability was 85%. He also expects the approval would be pushed back as far as 2024.
“In the wake of these changes, our total firm value estimate has declined to $3.6B from the prior $13.3B,” he said.
BridgeBio will now look toward the part B readout at 30 months, where the company will have a better idea about the effects of the drug on all-cause mortality and cardiovascular hospitalizations, said Neil Kumar, founder and CEO of BridgeBio, in a statement.
“We have now removed acoramidis from our model for BBIO, as data fromPart B will be required to understand if there is a commercial anglefor the drug,” Raymond James’ Leone wrote in a research note. “Our new price target of $17 is predicated largely on infigratinib, which will have an important read-out for achondroplasia during 2022.”
Selvaraju agreed, saying that there was still a chance that acoramidis should “not be totally discounted” until the 30-month readout.
Write to Sabrina Escobar at [email protected]