By Brady Huggett
Corvas International Inc. suffered a time-frame setback following talks with the FDA concerning the development of its product, rNAPc2, for deep-vein thrombosis. The news, added to missing analysts¿ estimates for the second quarter, chopped Corvas¿ stock down 30 percent.
Its stock (NASDAQ:CVAS) closed Tuesday at $7.58, down $3.37. It reported a net loss of about $9.6 million, or 35 cents per share, for the second quarter.
The San Diego-based company said in its second-quarter earnings release that it is reviewing comments the FDA made at a recent end-of-Phase II meeting about rNAPc2 for deep-vein thrombosis and pulmonary embolism, and that it is working with the agency on requirements for future testing. The upside for San Diego-based Corvas is that the FDA¿s remarks seemed unrelated to either safety or efficacy issues.
¿We¿ve lowered our rating to neutral¿ today,¿ said Mark Augustine, an analyst for U.S. Bancorp Piper Jaffray. ¿We expected them to start a Phase III trial by the end of the year. That is now off the table and it will start in ¿02.¿
Beyond the trial delay, Augustine wondered how the news would affect Corvas¿ attempts to partner rNAPc2, something it has plainly stated it wants to do.
¿[A deal] could still come this year,¿ Augustine told BioWorld Today. ¿How attractive that deal is now carries more risk. But they have made it clear to us that there is no outstanding safety or efficacy data that the FDA spoke of to them.¿
Randall Woods, Corvas¿ president and CEO, remained unruffled.
¿I think what the FDA is trying to do is treat the comments they give companies as helpful, to help set them up for success,¿ Woods said. ¿We have not yet received back the official minutes from that meeting and we won¿t get those minutes until the middle of next month. We have made the decision to delay our move into Phase III until 2002. But there are no safety or efficacy issues with this drug.¿
Woods soothed the worries over Corvas¿ potential partnership, as well.
¿Our goal is to partner rNAPc2 and this has not impacted our potential partners in a negative way,¿ he told BioWorld Today. ¿No one has left the table and no one has lost interest.¿
When a partnership for rNAPc2 will be shored up is not as important as who the partner is, he said.
¿We want to get the right partner on the right terms, so there is no time frame for that,¿ he said.
rNAPc2 is an injectable anticoagulant designed to prevent deep-vein thrombosis (DVT) and related complications. In a Phase II trial, the product reduced the risk of DVT by 50 percent compared to the standard of care. Woods pointed to those positive trial results as further proof that the drop in Corvas¿ stock is based on the Phase III pushback and not on the drug itself, something he¿s not particularly sweating. (See BioWorld Today, Sept. 15, 2000.)
¿It is mostly a matter of delay, and I have no less confidence [in the drug] than I had a month ago,¿ he said. ¿The fact is that it gets delayed a few months, but if that is as bad as it gets, I can live with that.¿
Other analysts shared that opinion and Woods pointed to a New-York based CIBC World Markets Corp. research note as proof it¿s not gloom and doom in San Diego.
¿In a note by Matt Geller [an analyst for CIBC], he¿s come out saying buy on weakness,¿¿ Woods said. ¿That¿s mostly the kind of sentiment I¿m getting today. It¿s been nice, the response we¿ve gotten. [Analysts] look at how much cash we have and see it as a buying opportunity.¿
Corvas ended its second quarter with $124.6 million in cash, cash equivalents and investments.
¿It¿s the market we are living in,¿ Augustine said. ¿We still believe [rNAPc2] has considerable promise. It¿s just that maybe doing what is prudent for a clinical program is not always helpful for a stock in the near term.¿