What Happened to CEMP Stock?
Cempra Inc (NASDAQ:CEMP) fell 56% by Thursday afternoon after Cempra’s new drug application for its pneumonia medicine was rejected by the U.S. Food and Drug Administration (FDA).
The news of the rejection of Solithromycin, an oral and intravenous pneumonia treatment, sent CEMP stock plunging to an all-time low at $2.65 a share by early afternoon trading, well below the initial public offering (IPO) price of $6.00 back in February of 2012. Thursday will cap off a disastrous 2016 for CEMP stock, which has seen its shares fall by over 91%.
The FDA response cited that Cempra would have to provide additional safety data and resolve unspecified issues with its manufacturing facility before the drug inspector could approve the medicine. This culminated in the plummeting of CEMP stock.
“Based on their review of the NDAs, the CRL stated that the FDA determined the risk of hepatotoxicity had not been adequately characterized,” said the company in a statement.
According to MarketWatch, Acting CEO David Zaccardelli said,
With more than $225 million of cash on hand, patent protection for solithromycin through 2032 and a pipeline that includes fusidic acid and other potential programs for solithromycin, including an ophthalmic formulation, we have flexibility to determine the best course forward for solithromycin and Cempra.
(Source: “Cempra shares crater on concerns about delay in getting pneumonia drug approved,” MarketWatch, December 30, 2016.)
The FDA said that the 920 patients in the safety database is too small a sample to adequately measure adverse effects, and it is recommending a study of about 9,000 patients. The higher sample size will allow the company to exclude serious drug-induced liver injury events at a rate of roughly 1:3,000 with a 95% probability.
The company said it’s looking to meet with the FDA and discuss the letter as soon as possible to address the issues raised. It also reassured investors that it has sufficient cash on hand to stay in business.