NEW YORK, NY / ACCESSWIRE / November 28, 2018 / Loxo Oncology and ACADIA Pharmaceuticals were two biotech stocks sinking on Tuesday. Traders showed their concern over ACADIA pricing a public offering of common stock. Loxo Oncology had positive news regarding the FDA however earlier in the week.
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Loxo Oncology, Inc.
ACADIA Pharmaceuticals Inc.
Loxo Oncology, Inc. shares closed down almost 9% on Tuesday with around 920,000 shares traded. The shares dropped despite positive news from the Company earlier in the week. On November 26th, Food & Drug Administration announced its approval of the company's and Bayer AG's Vitrakvi® (larotrectinib), the first ever oral TRK inhibitor for the treatment of adult and pediatric patients with advanced or metastatic solid tumors that have a neurotropic receptor tyrosine kinase, or NTRK, gene fusion without a known acquired resistance mutation. David Hyman, M.D., who was the global principal investigator for larotrectinib clinical trial remarked, "The FDA approval of larotrectinib marks an important milestone in how we treat cancers that have an NTRK gene fusion – a rare driver of cancer. I have seen firsthand how treatment with larotrectinib, which is designed specifically for this oncogenic driver, can deliver clinically meaningful responses in patients with TRK fusion cancer, regardless of patient age or tumor type." Analyst Dane Leone of Raymond James reiterated a "strong buy" rating on the stock with a $235 price target.
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ACADIA Pharmaceuticals Inc. shares closed down 12.64% yesterday on nearly 4.5 million shares traded. Wall Street wasn't reacting with confidence to the company's latest development. The biopharma company, which focuses on diseases of the central nervous system, announced the pricing of an underwritten public offering of 16,176,471 shares of its common stock, offered at a price to the public of $17.00 per share. The gross proceeds from this offering to ACADIA are expected to be approximately $275.0 million, before deducting underwriting discounts and commissions and other estimated offering expenses payable by the company. Given that the Company’s share closed Monday’s session around $19.5, higher than the price declared in the offer yesterday, investors reaction seems justified. It was not too long ago that the company reported a third quarter loss. Interim CFO Elena Ridloff said on the earnings call, "In the third quarter of 2018, we recorded $58.3 million in net sales, an increase of $22.7 million or 64% growth compared to the $35.6 million of net sales in the third quarter of 2017. The gross-to-net discount rate for Q3 was approximately 13%. Our inventory in the channel at the end of Q3 was unchanged from Q2."
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