Iterum Therapeutics Analyst Remains Bullish Despite Concerns Over FDA Letter

A lack of clarity and final decision in the U.S. Food and Drug Administration's (FDA) recent letter to Iterum Therapeutics PLC ITRM failed to deter H.C. Wainwright & Co’s bullish sentiment on Iterum stock.

The Iterum Analyst: H.C. Wainwright & Co. analyst Ed Arce maintained the firm’s Buy rating and a price target of $2.50 on shares of Iterum.

The Iterum Takeaways: Iterum announced it received a letter from the FDA on Thursday stating the agency found deficiencies in the company’s application for its new drug sulopenem etzadroxil/probenecid, according to a Friday analyst note.

The letter from the FDA failed to specify the deficiencies, leaving investors in the dark regarding the future of Iterum’s new drug, Arce said.

The analyst stated he is “inclined to believe that the deficiency is not critical, in other words, not related to safety or efficacy,” and thought the drug is still approvable as the FDA acknowledged its letter is not stating a final decision.
The $2.50 valuation is based on an NPV model, the analyst said. The model forecasts sales on sulopenem for three applications through 2037, which were then discounted to the present day using a 13.5% rate, which accounts for increased risk and weaker investor sentiment in the antibiotic space, Arce explained.

ITRM Price Action: Shares of Iterum Therapeutics plc. were down 37.99% to $1.42 Friday at market close.