La Jolla shares whacked as analysts spotlight disappointing PhIII fine print

Last February, shares of La Jolla Pharmaceutical $LJPC rocketed up on the news that its lead drug hit its primary endpoint in Phase III. At the crack of dawn Monday morning, though, the stock slid down 13% after investors and analysts examined the fine print and pondered the drug’s commercial prospects.

As we already knew, 70% of the patients with catecholamine resistant hypotension taking LJPC-501 responded with a significant increase in mean arterial pressure, compared to 23% in the placebo arm. Another positive: There was a significant drop in the use of catecholamine, which is associated with serious side effects.

But… There was no significant improvement in mortality risk.

Jefferies’ Eun Yang did the math:

On cardiac adverse events, there was no apparent difference between LJPC-501 vs. placebo (cardiac arrest, atrial fibrillation, ventricular tachycardia, acute MI, etc). This is perhaps due to the relatively small sample size of the study. However, current ATHOS Ph3 data does not seem to demonstrate the benefit of reducing catecholamine use by employing LJPC-501.

Add it up, she says, and while the drug still has a great shot at the market “its commercial potential could be debatable.” You can expect payers to clamp down hard on its use, crimping its revenue potential.

La Jolla’s shares dropped 13% on the news.

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