Share prices in late-stage biopharmaceutical company Achaogen (NASDAQ:AKAO) Inc. took a sharp rise today on the heels of news that the FDA positively inspected a manufacturing plant associated with the production of its drug plazomicin. At the time of writing, Achogen’s shares are valued at $12.47 USD – up 12.75% – bringing its market cap to $527.8M.
The inspection of Pfizer’s (NYSE:PFE) McPherson facility generated an outcome of ‘Voluntary Action Indicated’, essentially meaning that good production practices are being upheld. The plant’s new status means that the FDA has a clear road to approving plazomicin later this summer, hence eagle-eyed investors are buying into Achaogen now in anticipation of a rise in value at that time.
Blake Wise, CEO of Achaogen, said of the outcome: “With additional clarity around our manufacturing efforts, we look forward to the potential marketing approval and launch of plazomicin.” The news follows a successful month for Achaogen, who enjoyed another share surge earlier this month when the FDA announced plans to review the drug later in the year.
The drug is to be used in the treatment of complicated urinary tract infections (cUTI) as well as certain bloodstream infections. The FDA expects to review the drug for approval on June 25th, 2018.
Achaogen suffered a poor 2017, with shares falling a huge -36.5% from a high of $19.74 in August last year to today. In addition, a previous FDA inspection of the McPherson plant led to the association deeming it unacceptable to produce plazomicin, according to reports. So today’s news is certainly a positive turnaround and one that may see Achaogen gain some big numbers in the following months, particularly if plazomicin passes inspection.
Pharmaceutical companies often see enormous increases in share prices once their drugs are approved for licensing, manufacturing and selling, making them a huge industry of interest for investors. Part of the reason for this is that they are then capable striking multi-million dollar deals to do with the drug’s production. But be wary; although today’s news certainly makes it more likely that plazomicin will indeed be approved, it is not assured. As usual, invest with caution.
Other micro-pharma gainers this month include; CytRx (NASDAQ:CYTR), which leaped following positive cancer drug trials; Sorrento (NASDAQ:SRNE), on the rise after pipeline advancements; and Corbus Pharmaceuticals (NASDAQ:CRBP).
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