Analysts cut Savara after lead asset misses primary endpoint

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Landenburg Thalmann downgraded Savara (NASDAQ:SVRA) to “neutral” from “buy” and slashed its price target to $3 from $21 after lead asset, Molgradex, an inhaled formulation of recombinant human granulocyte-macrophage colony-stimulating factor, failed to reach its primary endpoint in a Phase 3 trial for the treatment of autoimmune pulmonary alveolar proteinosis.

H.C. Wainwright reduced its price target for Savara to $6 from $22 but maintained a “buy” rating.

Just after the opening on June 13, shares of Savara were quoted at $2.61, down $7.96, or 75%.

“While some secondary endpoints were met in those treated continuously for 24 weeks, by missing the primary endpoint, we do not believe the FDA will approve the drug with this data,” writes Ladenburg analyst Michael Higgins.

“While Molgradex demonstrated some systemic effects and its potential in non-tuberculous mycobacterial lung infections is muted but still plausible, the first quarter of 2020 outcome of the ongoing 30-patient nontuberculous mycobacterial Phase 2 OPTIMA (and the second quarter of 2020 readout of Savara’s other pivotal-stage asset, AeroVanc) suggests to us the stock will be flat and range-bound for the remainder of 2019,” he added.

Andrew Fein of HCW said the company plans to begin a dialogue with the FDA and EMA over the next several months to better understand the path forward in light of these results.

“We note regarding the FDA’s guidance on the statistical design of the study that positive results on the secondary endpoints could only be interpreted first with demonstration of a treatment effect on the primary endpoint,” he added.

Stephen Kilmer