Bell Potter downgrades QRxPharma after FDA shock

A former enthusiastic advocate of QRxPharma (ASX:QRX), Bell Potter Securities has revised its price target of the biotech after the FDA knocked back its application for approval for MoxDuo IR.

Bell Potter formerly had QRxPharma with a base target price of $2.54 and an optimistic target of $3.69.

It has now downgraded this target valuation to $1.12 base and $1.26 optimistic, although it has stated that this is a “very conservative” valuation.

QRxPharma’s share price tumbled nearly 60% to 70c in yesterday’s trading following the announcement that it has received a Complete Response Letter (CRL) from the FDA requesting additional information regarding the safety and effectiveness of MoxDuo IR.

While Bell Potter has revised its target price for QRxPharma down, it still expects MoxDuo to eventually get the go-ahead from the FDA.

“This is not the end of the road, by any means,” stated a Bell Potter statement. “Frequently in drug development a sponsor will receive a CRL, address the FDA’s issues, resubmit an application, and then receive approval.

“Consequently while this outcome is very disappointing it does not mean that QRxPharma will not ultimately receive approval.

“An analysis of recent NDA/BLA filings with the FDA show that only ~55% get approved the first time, but that a further ~19% are approved on the first resubmission after a CRL. On a pure probabilities basis these numbers suggests MoxDuo IR’s probability of success on refiling is at least 44%.”

As of midday today, the stock was changing hands for 64.5c, down an additional 8% for the day.