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Sell-Side Slashes DBV Tech Price Targets After Withdrawal Of BLA For Peanut Allergy Immunotherapy

Shanthi Rexaline

DBV TECHNOLOGIE/S ADR (NASDAQ: DBVT) shares were losing more than half of their value in Thursday trading following an update on the company's lead pipeline candidate.

What Happened

DBV said Wednesday after the close it has voluntarily withdrawn its Biologic License Application, or BLA, for Viaskin Peanut in children 4-11. The decision to withdraw the application was made at the behest of the FDA, which communicated its decision orally and in writing Dec. 18.

Reacting to the development, Bank of America Merrill Lynch analyst Tazeen Ahmad downgraded DBV from Buy to Underperform and reduced the price target from $30 to $8.

Morgan Stanley's Matthew Harrison maintained an Equal-weight rating and lowered the price target from $26 to $10.

Harrison now expects a delay of at least a year and sees potential commercialization in the second half of 2020. 

Why It's Important

Viaskin Peanut, a proprietary technology platform with applications in immunotherapy, is currently being evaluated in a Phase 3 study and has been given Breakthrough Therapy as well as Fast Track designations.

It is also being evaluated in a Phase 3 trial for the same indication in children ages 1-3, and in a Phase 2 trial for adolescents and adults.

The BLA submitted Oct. 18 lacked sufficient detail regarding data on manufacturing procedures and quality control, according to the FDA.

The agency had no qualms about the clinical module of the BLA.

The company said the additional information sought by the FDA can be made available without further clinical studies.

What's Next

"We remain confident in the clinical profile of Viaskin Peanut and its potential to offer treatment to peanut-allergic children. Our plan is to address these concerns as quickly as possible and to work closely with the FDA to provide an updated and complete file," CEO Daniel Tassé said in a statement. 

The totality of data collected for the therapy and the undermet need in peanut allergy justified a market for the patch, said BofA's Ahmad.

The firm is stepping to the sidelines as it awaits clarity on DBV's next steps, a potential cost savings initiative and new launch timelines, the analyst said. BofA is modeling for a $300-million cash raise in 2019, he said. 

Morgan Stanley's Harrison said he expects the company to communicate the path forward in the first quarter of 2019. 

Incidentally, Aimmune Therapeutics Inc (NASDAQ: AIMT) announced Wednesday before the market open it has initiated an international, late-stage study dubbed POSEIDON, to evaluate AR101, its immunotherapy candidate for treating peanut allergy in children 1-3. 

Although Aimmune shares pulled back 1.18 percent Wednesday, they were trading up 11.65 percent at $24.24 at the time of publication Thursday. DBV Tech shares were down 68.06 percent at $4.52. 

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Latest Ratings for DBVT

Date Firm Action From To
Dec 2018 Morgan Stanley Maintains Equal-Weight Equal-Weight
Dec 2018 Barclays Downgrades Overweight Equal-Weight
Dec 2018 Jefferies Downgrades Buy Hold

View More Analyst Ratings for DBVT
View the Latest Analyst Ratings

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