BridgeBio reversed premarket gains and tumbled Tuesday after the drugmaker's growth disorder treatment topped Wall Street's expectations in a Phase 2 study.
The biotech company tested a daily pill in patients with achondroplasia, a genetic disease that affects the limbs and spine. Achondroplasia is the most common cause of dwarfism.
After a year, patients taking BridgeBio's infigratinib had an annualized height velocity change of 2.51 centimeters (just under one inch) per year. At 18 months, the rate was 2.5 centimeters.
Mizuho Securities analyst Salim Syed noted the results outperformed Wall Street's expectations for a 2-centimeter improvement. Though growth slowed from months six to 12, the overall question was regarding the potential magnitude of infigratinib.
"Today's reported best-in-class data should settle any debate on this," he said in a report.
But the debate apparently rages on. BridgeBio stock, which jumped as high as 8.5% in early action, toppled 6.7% to 27.05 in recent trades. Shares undercut their 50-day line.
At the close on the stock market today, BridgeBio stock skidded 6.4% to 27.13.
BridgeBio Stock: Rivaling BioMarin's Voxzogo
The results also compare favorably to BioMarin Pharmaceutical's already approved drug, Voxzogo, Syed said. In its Phase 3 study, Voxzogo had an annualized height velocity of 1.35 centimeters per year after 18 months.
Further, patients who received BridgeBio's infigratinib for 18 months had a statistically significant improvement in the ratio between their upper body and lower body.
"As a reminder, there were no significant improvements in upper/lower body segment ratio in children receiving Voxzogo during its pivotal 52-week study, so we'd argue that the body proportionality data may represent a point of differentiation from Voxzogo in investor debates," Mizuho's Syed said. He has a buy rating and 53 price target on BridgeBio stock.
But Piper Sandler analyst Christopher Raymond disagreed, saying BridgeBio's drug "does not appear well-differentiated from Voxzogo." He says the annualized height velocity at 12 and 18 months is relatively in line with what he would expect from the BioMarin drug.
"Similarly, although BridgeBio showed a statistically significant improvement in body proportionality, we note that Voxzogo looked similar in Phase 2, but proportionality was not recapitulated in Phase 3," he said in a report.
Raymond kept his overweight rating on BioMarin shares. He doesn't have a rating on BridgeBio stock.
Safety Appears Clean
Importantly, the safety data looks clean. There were no cases of hyperphosphatemia, an electrolyte disorder, and zero hypergrowth cases. Further, there were no treatment-related side effects or side effects that prompted patients to stop treatment.
BridgeBio stock retook its 200-day moving average at the open, according to MarketSurge.
But shares later undercut that key mark.
Piper Sandler's Raymond says the competitive threat to BioMarin's Voxzogo remains to be determined. "Overall, these data do not point to infigratinib's clinical profile to be dramatically differentiated from Voxzogo's," he said. "And without any clinical differentiation, we see the competitive threat as mixed."
Follow Allison Gatlin on X, the platform formerly known as Twitter, at @IBD_AGatlin.
