Why Travere Therapeutics Stock Got Trounced on Tuesday
Key Points
The FDA has extended its review of the company's Filspari.
This is a setback for the biotech's leading drug candidate.
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A fresh setback on the regulatory front was the development that put a damper on Travere Therapeutics (NASDAQ: TVTX) stock on Tuesday. Investors assertively sold out of Travere as a result, leaving the biotech's shares with a nearly 15% loss on the day.
Unwanted delay
Travere's leading drug candidate is Filspari, which targets a kidney disorder called focal segmental glomerulosclerosis (FSGS). The company announced that the U.S. Food and Drug Administration (FDA) has extended its review timeline for evaluating the company's New Drug Application for the medication.
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The new target action date for the regulator to render a decision is April 13. That's exactly three months after the original self-imposed deadline of Jan. 13, Tuesday's date.
Travere wrote in a press release that this follows its submission of responses requested by the FDA to, in the healthcare company's words, "further characterize the clinical benefit of Filspari."
No need to push the panic button
The stakes are high with this drug. If and when approved by the FDA for FSGS, it would be the first green-lighted drug given the nod for the disorder. Filspari is already FDA-approved for treating IgA nephropathy (Berger's disease), a chronic autoimmune kidney disease.
Delays due to what the FDA terms "major amendments," such as responses to inquiries, are not unusual for the careful regulator. I think the market overreacted to this news, and I still feel that Travere has much potential for this new Filspari indication.
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Eric Volkman has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
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