Cempra, Inc. (NASDAQ:CEMP) Shares Tank Following Concerns of Drug Approval Delay

Clinical-stage drug company, Cempra, Inc. (NASDAQ:CEMP), was informed by the USFDA that it cannot approve its newest drug without additional data.

Shares of clinical-stage drug company Cempra Inc. cratered Thursday, after the U.S. Food and Drug Administration said it cannot approve a pneumonia drug without additional safety data and improvements at a manufacturing facility.

Shares of the Chapel Hill, N.C.–based company closed down 57% to $2.60, boosting year-to-date losses to 91.7%. The stock is now sitting at its lowest level since the company went public in February 2012 at $6 a share. Trading volume of 20.8million shares was more than eight times the daily average.

Cempra CEMP, -57.38% said the FDA had sent it a so-called complete response letter regarding its new drug applications (NDAs) for solithromycin, a treatment for community-acquired bacterial pneumonia. The letter states that the FDA cannot approve the NDAs in their current form and that the company must provide additional safety data and resolve unspecified issues with its manufacturing facility.

“Based on their review of the NDAs, the CRL stated that the FDA determined the risk of hepatotoxicity had not been adequately characterized,” the company said in a statement.

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The FDA said the size of the safety database — 920 patients — is too small to measure adverse effects and is recommending a study of about 9,000 patients. That will give the company the ability to exclude serious drug-induced liver injury events at a rate of about 1:3,000 with a 95% probability.

The company said it would seek a meeting with the FDA as soon as possible to discuss the issues raised in the letter but moved to reassure investors that it has sufficient funds to remain in business.

“With more than $225 million of cash on hand, patent protection for solithromycin through 2032 and a pipeline that includes fusidic acid and other potential programs for solithromycin, including an ophthalmic formulation, we have flexibility to determine the best course forward for solithromycin and Cempra,” Chief Executive David Zaccardelli said.

Fusidic acid is the company’s second lead product candidate and it has completed enrollment of an initial Phase 3 trial of the compound as a treatment for patients with acute bacterial skin infections. The company is also exploring a study of fusidic acid as a treatment for refractory infections in bones and joints.

On a conference call with analysts, Zaccardelli said that the company can’t estimate the cost of a new trial until it has met with the regulator but that it doesn’t expect a product approval before 2018.

The benchmark S&P 500 SPX, -0.03% was up 0.1% Thursday and has gained about 10% on the year.

Original Source

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Shares of Cempra, Inc. (NASDAQ:CEMP) are actively moving -57.38% thus far today on the news and have traded in the range of $2.55 – 3.20 during the session.  A number of research firms have recently weighed in on the stock, providing future price targets. The covering firms currently have a consensus one-year price target of $13.77 on the stock.  This is according to brokerage analysts polled by Thomson Reuters First Call.  This is the average number from the individual targets provided by the firms.  Analysts are projecting earnings per share of $-0.60 for the next fiscal quarter.  For the current year, analysts are predicting earnings of $-2.40 per share according to First Call.

In looking at where the stock is trading on a technical level, the stock is trading -61.73% away from its 50-day moving average of $6.79.  Based on the most recent available data, the equity is -91.88% off of its 52-week high of $32.00 and +1.96% away from its 52-week low which is $2.55.

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Today, the stock opened at $3.15 and the last bid at the time of writing stood at $2.60.  During the session thus far, the equity dipped down to $2.55 and touched $3.20 as the high point.  Cempra, Inc. (NASDAQ:CEMP) has a market cap of $136.19M and has seen an average daily volume of 2,179,010 over the past three months.

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