The Food and Drug Administration issued a dubious statement Amylyx Pharmaceuticals‘ (AMLX) ALS treatment on Monday, causing IPO stock to plummet.
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Shares in the recent IPO went on deck after the FDA’s reviewer cast doubt on the effectiveness of Amylyx’s drug in patients with ALS, or amyotrophic lateral sclerosis. Also known as Lou Gehrig’s disease, ALS affects nerve cells in the brain and spinal cord. Patients lose muscle control over time.
In a briefing document released ahead of a key meeting on Wednesday, the assessor said the result of the Amylyx test was “not exceptionally convincing and there were analytical and interpretative issues related to its testing.”
This caused the IPO stock to plunge 36% to 16.01 in today’s stock market. It was the second bad ALS news on Monday. biogenic (BIIB) and Ionis Pharma (IONS) also scrapped a treatment that tests showed no benefit.
IPO Stock: Survival Perks?
Amylyx ran a study called Centaur that assessed patient muscle function and survival over time.
However, the FDA’s reviewer noted that the data on patient survival is incomplete. Some data are missing due to missteps at the start of the study. In addition, only a few patients participated in the open-label study following the placebo-controlled study. An open-label study does not require a placebo. The patients know that they are receiving the test drug.
“There was no evidence of an impact on survival” in the open-label study, the FDA reviewer said. “And there are challenges in interpreting the results of the (open-label study) survival analysis because of issues such as the open-label design and the exploratory nature of the analyses.”
The IPO stock plummeted to its lowest level ever, undercutting its IPO price of $19 in January.
It’s important to note that Amylyx first filed for approval last year. In the briefing document, the reviewer says the FDA has asked Amylyx to conduct a phase 3 trial to evaluate the drug’s benefits. This test is now running. But it also prompted Amylyx to file an application for permission in the meantime.
Highly rated stock
The FDA’s Peripheral and Central Nervous System Drugs Advisory Committee will meet Wednesday to discuss the treatment of Amylyx. The panel of experts will discuss the benefits and risks of the treatment before voting on whether the studies demonstrate the benefit of the treatment in ALS patients.
Their recommendation is not binding, but the FDA often follows the panel’s guidance.
Despite the slump, IPO stock has a Relative Strength Rating of 95, according to IBD Digital. The RS rating represents a stock’s 12-month performance relative to all other stocks, placing the stocks in the top 5% of all stocks by this standard.
Follow Allison Gatlin on Twitter at @IBD_AGatlin.
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