A kidney disease treatment from Vera Therapeutics (VERA) lagged rivals from Chinook Therapeutics (KDNY) and Otsuka on one key measure, analysts said Wednesday, and Vera stock plummeted.
XVera tested its drug, dubbed atacicept, in patients with immunoglobulin A nephropathy. Also known as Berger's disease, the condition causes inflammation and progressive damage to the kidneys. One way to help patients is to lower levels of protein in the urine, or proteinuria. After 24 weeks of treatment, patients who received atacicept had an average 31% reduction in proteinuria.
But that was below proteinuria reductions for Chinook's and Otsuka's experimental drugs. Chinook's drug has lowered protein in the urine by roughly 48%-54% after 24 weeks, SVB Securities analyst Joseph Schwartz said in a note to clients. Further, Otsuka's drug has led to a 43% proteinuria reduction compared with a placebo.
On today's stock market, biotech stock Vera crashed 64.7% to close at 6.46. Shares dropped out of a consolidation with a buy point at 23.49, according to MarketSmith.com. Meanwhile, Chinook stock rose a fraction to 25.64.
Biotech Stock: 'Bar' Keeps Moving Higher
The results are likely strong enough for Vera to gain Food and Drug Administration approval, Wedbush analyst Laura Chico said in a note. Also, the only approved drug on the market, Tarpeyo, set a bar of an about 30% reduction in proteinuria to win the FDA's blessing.
"However, the immunoglobulin A nephropathy competitive landscape is fluid and competitors keep pushing the proteinuria reduction 'bar' higher," Chico said.
She slashed her price target on Vera's biotech stock to 8 from 33, and moved her rating to neutral.
Even if Vera gains approval, atacicept will likely be less used commercially than drugs from competitors.
"We do think ultimately the agents which confer the most meaningful proteinuria reductions will see the broadest adoption in the immunoglobulin A nephropathy community," she said.
Final-Phase Testing In The Works
Vera is now planning to begin a second Phase 3 study of atacicept in the first half of this year. Also, Chico calls for the study to run for two-and-a-half years. That puts the launch timing out to 2027.
The results are a boon for Chinook's drug, known as BION-1301, SVB's Schwartz said.
"In the context of the Vera data, we continue to view BION-1301's profile as potentially best-in-class," he said. He has an outperform rating on biotech stock Chinook.
Chinook shares are also highly rated with a Relative Strength Rating of 98, according to IBD Digital. This puts the biotech stock in the leading 2% of all stocks in terms of 12-month performance. Further, Vera stock has a lower RS Rating of 37.
Follow Allison Gatlin on Twitter at @IBD_AGatlin.
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