Ahead of the Bell: GPC Biotech
Tuesday July 24, 6:55 am ET
Following Sharp Selloff, GPC Biotech Faces FDA Advisory Group
NEW YORK (AP) -- A government advisory committee on Tuesday could hold the fate of GPC Biotech AG's prostate cancer drug candidate Orplatna in its hands.
Shares dropped 12.7 percent Monday to end at $20.95. The decline followed a 25 percent selloff Friday, after a Food and Drug Administration oncology advisory committee questioned the methods GPC used to test and study the drug.
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The FDA is not required to follow the recommendations of the panel, but often does.
Goldman Sachs analyst Stephen McGarry, in a client note, said "these concerns are addressable and GPC Biotech will be able to robustly defend the approach it has taken."
The Oncology Drugs Advisory Committee, in a brief ahead of the Tuesday meeting with the company, raised several issues and pondered whether the FDA should wait on making a decision until final data from a late-stage study is available. That survival data isn't expected until the end of the year.
If the panel says the concerns are serious, shares could fall 70 percent to 90 percent, the analyst noted. However, McGarry thinks that's unlikely.
There is a 50-50 change the oncology committee could recommend the drug for approval without waiting for the survival data, the analyst added, which would send shares up.
Finally, the committee might recommend approval contingent on the survival data, which could weaken shares. The analyst said investors should buy the stock if this happens, since the study is likely to show good results.
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