Ladenburg Thalmann slashed its price target for Aradigm (NASDAQ:ARDM) to $7.50 from $26 but maintained its “buy” rating after the company reported mixed top-line Phase 3 results for Pulmaquin for the treatment of non-cystic fibrosis bronchiectasis (NCF-BE).
Shares of Aradigm dropped 57%, or $2.99, to close at $2.25 on Dec. 1.
The company reported positive results in the ORBIT 4 study and negative results in the ORBIT 3 study. “Bottom line is we continue to believe Pulmaquin is an approvable drug,” writes analyst Matt Kaplan.
As a result of the mixed top-line results for the two ORBIT Phase 3 trials, he said the lower price target is based on the “uncertainty associated with the path forward for the program.” He expects the company to meet with the FDA in the next two months to determine the necessary steps to facilitate an NDA filing.
“We believe the worst case scenario is Aradigm will have to conduct another Phase 3 trial with positive results to facilitate an NDA filing,” Mr. Kaplan said.
“Alternatively, as a best case scenario, based on the positive results for the ORBIT 4 trial, the positive data in the combined analysis, the clean safety profile in both studies and the significant unmet need in the treatment of NCF-BE, we believe Aradigm can make a reasonable case to the FDA to facilitate an NDA filing with the current data combined with a significant Phase 4 commitment,” he added.