Evoke Pharma Plunges 70% Prompting Brean Capital To Downgrade The Stock From Buy

Evoke Pharma Inc EVOK, a specialty pharmaceutical company that focuses on the development of drugs to treat gastrointestinal (GI) disorders and diseases, issued a blow to investors Monday morning. Evoke Pharma said that top-line results from a Phase 3 clinical trial of EVK-001 in female patients with symptomatic diabetic gastroparesis did not achieve its primary endpoint of symptom improvement at Week 4. Related Link: Evoke Pharma's Phase 3 Clinical Trial Of EVK-001 Fails To Achieve Primary Endpoint Following Evoke Pharma's announcement, Difei Yang of Brean Capital downgraded the stock from Buy to Hold with no assigned price target. Yang stated in his note that there is some "highly inconsistent" data from the study. Specifically, 28 of the 41 enrolling sites did show a statistical significant benefit at Week 4 for EVK-001 in contrast to results from the other 13 sites that showed a significantly significant benefit for the placebo. "The data stands out as being unusual to us and it is difficult for us to figure out if it was a close miss or major miss," Yang wrote. "In addition, it is too early to determine if another Phase III is warranted—that decision has to be made by the management post detailed data analysis." Yang also pointed out that Evoke Pharma ended the March quarter with just $6.1 million in cash and $2.4 million in short-term debt and accounts payable. This figure is "not sufficient" for management to run another Phase 3 trial with roughly 200 patients. Bottom line, Evoke Pharma should release additional data analysis in the coming months but until then there is limited visibility on the path forward for EVK-001. Accordingly, the analyst is now recommending investors "move to the sidelines" until a clinical development pathway and timeline is communicated.