The Food and Drug Administration posted a doubtful take on Amylyx Pharmaceuticals' ALS treatment on Monday, leading the IPO stock to plummet.
Shares of the recent initial public offering hit the deck after the FDA's reviewer doubted the impact 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 posted ahead of a key meeting Wednesday, the reviewer said the result of Amylyx's test "was not exceptionally persuasive and there were analytical and interpretive issues associated with its consideration."
That led the IPO stock to plunge 36% to 16.01 on today's stock market. It was the second piece of bad ALS news on Monday. Biogen and Ionis Pharmaceuticals also scrapped a treatment that didn't show any benefit in testing.
IPO Stock: Survival Benefits?
Amylyx ran a study called Centaur that assessed patients' muscle function and survival over time.
But the FDA reviewer noted data surrounding patient survival aren't complete. Some data are missing due to missteps at the beginning of the study. Further, few patients enrolled in the open-label study following the placebo-controlled study. An open-label study doesn't require a placebo. Patients know they're receiving the test drug.
"There was no evidence of effects on survival" in the open-label study, the FDA reviewer said. "And there are challenges with interpreting the (open-label study) survival analysis results due to issues such as the open-label design and the exploratory nature of the analyses."
The IPO stock crashed to its lowest-ever point, undercutting its initial public offering price at 19 in January.
It's important to note, Amylyx initially filed for approval last year. In the briefing document, the reviewer says the FDA requested Amylyx run a Phase 3 study to assess the drug's benefit. That test is now ongoing. But it also invited Amylyx to file for approval in the meantime.
Highly Rated Stock
The FDA's Peripheral and Central Nervous System Drugs Advisory Committee will meet Wednesday to discuss Amylyx's treatment. The panel of experts will debate the merits and risks of the treatment before voting whether the studies support the treatment's benefit in ALS patients.
Their recommendation isn't binding, but the FDA often follows the panel's guidance.
Despite the dive, the IPO stock has a Relative Strength Rating of 95, according to IBD Digital. The RS Rating pits a stock's 12-month performance against all other stocks. This puts shares in the top 5% of all stocks on that measure.
Follow Allison Gatlin on Twitter at @IBD_AGatlin.
