Theravance Stock Up On Fast Track Status For Velusetrag

Theravance Biopharma, Inc.’s (NASDAQ:TBPH) shares were up 5.1% after the company announced that the FDA has granted Fast Track status to one of its pipeline candidates, velusetrag (a selective 5-HT4 receptor agonist), for the treatment of symptoms associated with idiopathic and diabetic gastroparesis.

Theravance’s year-to-date share price movement shows that the stock has outperformed the Zacks classified Medical-Drugs industry. Specifically, the stock has gained 86.1% so far this year, while the industry witnessed a decline of 25.2%.

We note that the FDA grants Fast Track status to facilitate the development and accelerate the review process of candidates that are being developed for the treatment of serious conditions with unmet medical need. The status will allow the company to communicate with the FDA frequently during the development, making the candidate eligible for accelerated approval and/or priority review, if the required criteria are met. Additionally, the company is eligible to submit completed sections of the new drug application on a rolling basis, resulting in the possibility of a faster review process.

Velusetrag is currently being evaluated in a multi-center, double-blind, randomized, placebo-controlled, parallel-group, phase IIb study in patients with confirmed gastroparesis of either diabetic or idiopathic origin. Data from the study are anticipated mid 2017.

Additionally, a phase II proof-of-concept study on velusetrag in patients with chronic idiopathic constipation has been completed.

We are encouraged by the FDA granting Fast Track status to velusetrag. According to the press release issued by Theravance, gastroparesis is estimated to affect about six million people in the U.S.

Given the lack of treatment options for idiopathic gastroparesis with just one FDA-approved product for diabetic gastroparesis, there exists strong unmet medical need.

We note that Theravance is developing velusetrag in collaboration with Alfa Wassermann. Per the agreement terms, the bulk of phase II costs is being funded by Alfa Wassermann with an exclusive option to develop and commercialize velusetrag in the EU, Russia, China, Mexico and certain other countries. Theravance, on the other hand, retains the full rights to velusetrag in the U.S., Canada, Japan and certain other countries.

Apart from velusetrag, Theravance’s pipeline comprises promising candidates like revefenacin. Currently, revefenacin is being evaluated in a phase III program as a once-daily, nebulized treatment for chronic obstructive pulmonary disease.

THERAVANCE BIO Price and Consensus

Zacks Rank & Key Picks

Theravance currently carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the health care sector include MannKind Corporation (NASDAQ:MNKD) , Sucampo Pharmaceuticals, Inc. (NASDAQ:SCMP) , and Vanda Pharmaceuticals, Inc. (NASDAQ:VNDA) . All the three stocks sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

MannKind’s estimates narrowed from loss of 24 cents to earnings of 12 cents for 2016 over the last 60 days. For 2017, loss estimates narrowed from 14 cents to 9 cents over the last 60 days. The company posted a positive surprise in two of the four trailing quarters with an average beat of 103.33%.

Sucampo’s earnings estimates increased from $1.03 to $1.22 for 2016 and from $1.30 to $1.58 for 2017 over the last 60 days. The company posted a positive surprise in all of the four trailing quarters with an average beat of 35.55%.

Vanda’s loss estimates narrowed from 62 cents to 52 cents for 2016, while its earnings estimates increased from 13 cents to 22 cents for 2017 over the last 60 days. The company posted a positive earnings surprise in three of the four trailing quarters with an average beat of 56.65%. Its share price has surged almost 72% year to date.

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