Broker Wedbush has repeated a 'neutral' stance on biopharma Y-mAbs Therapeutics Inc (NASDAQ:YMAB) following news that the US Food and Drug Administration (FDA) has turned down the company's application concerning a treatment for a rare form of nerve cancer in pediatric patients.
On December 1, the company that the regulator had issued a complete response letter (CRL) for the Biologics License Application (BLA) for the investigational medicine 131I-omburtamab (omburtamab) to treat CNS/leptomeningeal metastasis from neuroblastoma.
The letter indicated that the FDA completed the review of the application and determined that it was "unable to approve the BLA in its current form".
'The Grinch That Stole Omburtamab'
In a note entitled: "The Grinch That Stole Omburtamab", Wedbush said that the outcome had been expected following a recent Oncologic Drugs Advisory Committee (ODAC) meeting where the committee unanimously voted to reject the evidence that omburtamab improved OS in patients.
"The CRL recommends that YMABs meet with the FDA to discuss a new trial design to validate its potential efficacy in the setting," wrote analysts.
In a statement from the company, Thomas Gad, CEO, had said: "While we evaluate the implications of the CRL for the future of omburtamab, we are excited about refining our focus primarily to drive growth from DANYELZA and validate our SADA platform in the clinic, with the goal of bringing innovative solutions to patients and value to our shareholders."
Researchers at pharma group MSK developed omburtamab, which is exclusively licensed by MSK to Y-mAbs. As a result, MSK has institutional financial interests in the compound.
Wedbush has a price target of $4 on the shares, derived from 6 times' multiples to the 2027 estimated US sales of naxitamab in neuroblastoma and osteosarcoma, discounted back between 15-25%.
Shares were trading at US$4.40 each on Friday morning.
Contact the writer at giles@proactiveinvestors.com