Reata Pharmaceuticals took a step closer to launching its highly anticipated Friedreich's ataxia drug on Friday with a new Food and Drug Administration filing, but RETA stock pared back gains in afternoon trades.
The filing pertains to the manufacturing process for Skyclarys. Skyclarys gained FDA approval in February, but the launch stalled out after the company discovered a drug substance impurity above the agreed-upon threshold in its manufacturing process.
Now, Reata hopes to solve that by asking the FDA to increase the limit on how much of that impurity can show up in the manufacturing process. The FDA is reviewing Reata's application and is expected to make a decision in mid-August.
On today's stock market, RETA stock sank a fraction to 93.38.
RETA Stock: 'When, Not If' Skyclarys Launches
Skyclarys is the first treatment for Friedreich's ataxia to gain FDA approval. When that happened, RETA stock soared almost 200% in a single day. Friedreich's ataxia is a rare genetic condition that causes damage to the nervous system and leads to movement problems.
SVB Securities analyst Joseph Schwartz expects Skyclarys to have a successful launch. Notably, Reata has said it believes it can produce Skyclarys within the original specifications if necessary — a backup plan if the FDA doesn't approve Reata's request, he said.
"We continue to believe it is a matter of when, not if, the drug makes it to market," he said in a report. "And we think that the launch could be one of the strongest in the rare disease space."
Schwartz has an outperform rating and 115 price target on RETA stock.
Shares have a best-possible Relative Strength Rating of 99, according to IBD Digital. This means RETA stock has outperformed 99% of all stocks over the last 12 months. Reata stock just dipped below its 50-day moving average, MarketSmith.com shows.
Follow Allison Gatlin on Twitter at @IBD_AGatlin.
