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Ahead of the Bell: ChemoCentryx shares edge higher

The Associated Press

Shares of ChemoCentryx Inc. advanced Wednesday before markets opened and a day after the drug developer said it was encouraged by initial results from a mid-stage study of a potential autoimmune disease treatment.

The report overshadowed a downgrade from Citigroup and a fading business relationship with a major drug developer.

ChemoCentryx said data from a study of its drug, labeled CCX168, showed encouraging signs that the treatment reduced the time it takes to control the disease and helped reduce steroid exposure. The company said it hopes to start a late-stage study of the treatment next year, and it plans to apply to the Food and Drug Administration for breakthrough therapy and orphan drug designations, which would lead to benefits like a faster development process and some protection from competition.

At the same time, GlaxoSmithKline returned rights to a potential rheumatoid arthritis treatment, the company said, and no active research programs now remain under its alliance with the British drugmaker.

Citigroup analyst Yaron Werber downgraded his rating on the stock to "neutral" from "buy/high risk." He said Wednesday that the design of the CCX168 study made results difficult to interpret and while the ChemoCentryx has an innovative pipeline of potential products, "their drug discovery engine is still not validated."

"With few catalysts ahead, we do not believe that the stock will outperform in the next 12 months," Werber wrote.

However, analysts with Stifel Nicolaus said that CCX168 shows promise, and that the most recent studies "demonstrate compelling efficacy across multiple renal." Parameters.

ChemoCentryx shares closed at $5.02 on Tuesday and then climbed more than 3 percent, or 17 cents, to $5.19 Wednesday before markets opened. The shares are still down more than 50 percent since closing 2012 at $10.94.

ChemoCentryx is based in Mountain View, Calif.