A "bruising" Food and Drug Administration meeting for Cytokinetics was actually a blessing in disguise, an analyst said Wednesday as CYTK stock surged.
Late Tuesday, a panel of FDA experts voted 8-3 against Cytokinetics' drug, omecamtiv mecarbil, saying the benefits don't outweigh its risks for patients experiencing heart failure. But Needham analyst Serge Belanger says investors are far more interested in another Cytokinetics drug. That medicine, dubbed aficamten, is in testing for another heart disease.
"We expect that many investors will view this advisory committee outcome and a potential non-approval of omecamtiv as a blessing in disguise that forces Cytokinetics to focus its efforts and investments solely on aficamten development," he said in a note to clients.
On the stock market today, CYTK stock jumped 8% to 41.41.
CYTK Stock: Focus Back On Aficamten
The FDA's experts took issue with the small impact omecamtiv mecarbil had on lowering the risk of death in patients at risk of heart failure, Belanger said. They were also concerned about an analysis showing benefits in a subgroup of patients, safety issues and the dosing strategy. He kept his buy rating and 60 price target on CYTK stock.
Overall, these previously known concerns led the panel to vote against Cytokinetics' drug. The full FDA will weigh the panel's vote before making its decision.
But CYTK stock investors likely didn't view omecamtiv mecarbil as the biotech company's strongest candidate. In the second half of 2023, Cytokinetics is expected to have Phase 3 results for aficamten in patients with thickened heart muscles, a condition called hypertrophic cardiomyopathy.
Aficamten looks likely to compete with Bristol Myers Squibb's Camzyos.
"Investors may actually respond positively to the negative advisory committee (vote)," Mizuho Securities analyst Salim Syed said in a note. "The overall implication being that Cytokinetics would have a lower-than-expected cash burn rate in 2023, a 'cleaner' story and investors can place their attention back onto aficamten."
He has a buy rating and 80 price target on CYTK stock.
Follow Allison Gatlin on Twitter at @IBD_AGatlin.
