What occurred

Shares of the mid-cap biopharma Ascendis Pharma A/S (ASND -29.91%) are underneath heavy strain right now. Particularly, the drugmaker’s inventory was completed by a hefty 34% as of 11:24 a.m. ET Monday morning. 

What went incorrect? Forward of the opening bell, Ascendis introduced that the Meals and Drug Administration (FDA) has recognized deficiencies in its New Drug Utility (NDA) for the hypoparathyroidism candidate TransCon PTH (palopegteriparatide) that stop the company from holding additional discussions about labeling and post-marketing necessities/commitments. Ascendis’ administration additional famous that the precise deficiencies weren’t disclosed within the letter and that this notification doesn’t replicate the FDA’s last regulatory determination concerning TransCon PTH’s NDA.

So what

What is the large deal? With a wide-open area, Wall Avenue analysts had sky-high expectations for TransCon PTH’s business prospects as a remedy for hypoparathyroidism. In truth, the drug was forecast to haul in additional than $1 billion in annual gross sales by mid-2025, based on a number of analysts. 

Now, the excellent news is that this deficiency letter could in the end translate into nothing greater than a delay of some months. It is exhausting to inform with out additional particulars. Nevertheless, traders clearly aren’t taking any probabilities on this risk-off surroundings. 

Now what

Is Ascendis inventory a bad-news purchase? Hypoparathyroidism represents a excessive unmet medical want. As such, it might be stunning if the FDA did not work intently with Ascendis to resolve these excellent deficiencies. Then once more, it does rely on how severe these deficiencies transform.

In the long run, although, Ascendis stands a good likelihood of getting TransCon PTH over the end line, primarily based on the drug’s robust medical knowledge on this setting. In flip, this beaten-down pharma inventory could be value shopping for when you’re comfy with danger.