Vera Therapeutics stock crashes 60% on trial data, Evercore 'comfortably buying weakness'

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By Senad Karaahmetovic 

Shares of Vera Therapeutics (NASDAQ:VERA) are trading more than 50% lower in pre-market Wednesday after the company presented the results from its Phase 2b "Origin" clinical trial of atacicept in patients with immunoglobulin A nephropathy.

The drug met the primary endpoint at 24 weeks, including a 33% mean reduction in proteinuria from baseline, the company said.

"The positive topline results from the ORIGIN clinical trial demonstrate atacicept’s ability to reduce Gd-IgA1, the source of this disease, which in turn leads to clinically meaningful reductions in proteinuria at an early, 24-week time point, and is strongly supportive of a long-term benefit on kidney function," said Jonathan Barratt, PhD, FRCP, The Mayer Professor of Renal Medicine, University of Leicester, U.K.

Cowen analysts projected last week that Vera stock could drop sharply if the proteinuria reduction fell in the 30-35% range. This is because the drug may be seen as less competitive against future rival treatments. In a more positive scenario, Cowen said, shares could surge up to 40%.

The company said it plans to continue developing atacicept with the Phase 3 trial set for the first half of this year.

Despite a crash in Vera stock, Evercore ISI analysts said the broker is comfortable in "buying the stock on weakness given the above in the context of the unmet medical need in IgAN, a lifelong disease that starts early in life."

Similarly, JPMorgan analysts argue that the selloff seems like an overreaction "given that atacicept remains in the game (acknowledging the 36-week data will be an important catalyst in 2Q23) and has a safety profile that appears cleaner than our expectations."

On the other hand, Wedbush analysts downgraded shares to Neutral with an $8 per share price target (down from the prior $33).

"We do see atacicept as potentially approvable assuming results are replicated; however, we also see proteinuria lowering as the most likely driver of prescribing. To that end, we are updating our estimates to shift potential launch to FY27 and after shallowing our market share assumptions," the analysts wrote.

As of 08:13 EST (13:13 GMT), Vera stock is down 61.2% in pre-market Wednesday.