FDA committee deems UroGen drug unsafe; shares plunge 45%

Shares of UroGen Pharma, which is pursuing a bladder cancer therapy, plunged almost 45% yesterday, May 21, after a U.S. FDA committee deemed the company’s drug too risky to be approved.

Yesterday, UroGen Pharma plummeted 44.7% to $4.10 per share after the company revealed that the FDA’s Oncologic Drugs Advisory Committee had concluded that UGN-102 (mitomycin) was not sufficiently safe to be approved. Five of the nine committee members voted that the drug’s risks outweigh its potential benefits for patients.

UGN-102 is designed to treat recurrent low-grade bladder cancer without surgery, through an injection directly into the bladder. The drug has already completed its phase III clinical trials on patients, the results of which the committee reviewed. The most common side effects among study participants included urinary issues, blood in the urine, urinary tract infections, frequent urination, and fatigue. All of these are manageable in routine urologic practice, the company argued in the press release.

The committee’s vote against the drug does not mean it will not be approved. The final decision lies with the FDA, which, however, takes the committee’s recommendations seriously. The regulator is expected to announce its verdict on on approval of mitomycin by June 13.

UroGen has lost nearly 60% of its market value over the past week. On May 16, it dropped 20% after the FDA expressed concerns about the quality of the phase III trials, insisting on a randomized study that the company had not conducted. In such studies, participants are randomly assigned to receive either the investigational drug or standard treatment, which helps reduce bias and improve the reliability of results.

Despite this, analysts remain upbeat and have not revised their outlooks on the company.

On May 14, Scotiabank analyst George Farmer reiterated his “buy” recommendation on UroGen Pharma, with a target price of $23 per share. Wall Street’s consensus rating is a “strong buy,” with an average target price of $33.71 per share, 722% above current quotes.

As of the end of the first quarter, UroGen had $200.4 million in cash and securities. The company also reported $122.0 million in long-term debt and $123.3 million in a prepaid forward obligation related to a contract to support the initial launch of UGN-102 upon approval.

Revenue came in at $20.3 million, but R&D and general expenses resulted in a net loss of $43.8 million. According to Seeking Alpha, the company has a cash runway of only 4-5 quarters, meaning UroGen may not have enough funding to conduct another trial if the FDA demands one.