Tesaro Shares Lower On Receipt Of FDA Complete Response Letter

On Wednesday, TESARO Inc TSRO announced it had received a complete response letter from the FDA for its candidate, Varubi, in chemotherapy-induced nausea and vomiting.

Leerink’s Seamus Fernandez maintains an Outperform rating on the company.

Temporary Setback

According to Tesaro’s press release, the FDA “requested additional information regarding the in vitro method utilized to demonstrate comparability of drug product produced at the two proposed commercial manufacturers for rolapitant IV that were included in the NDA.”

The company also stated that the FDA did not express any concerns regarding the efficacy or safety of Varubi, an IV formulation, and that further clinical trials had not been requested.

Fernandez believes this is only a temporary setback for Tesaro and that management expects to able to address the issue in a timely manner to gain approval in the first half of 2017.

Peak Estimates Maintained

“Ultimately, investor focus remains predominantly on the company's PARP inhibitor niraparib and we continue to expect a broad label for second-line or greater ovarian cancer maintenance by the PDUFA date of 6/30/17,” the analyst said.

Expecting a speedy response to the FDA’s CRL, Fernandez does not expect any significant impact to the peak Varubi estimates of worldwide sales of $343 million by 2026, with a majority of the sales coming from the United States.

At its peak, Varubi is expected to capture 35 percent share of the U.S. market and 25 percent of the EU NK-1 market, and for the IV formulation to witness 85 percent sales in the United States, with 20 percent coming from the EU.

At last check, shares of Tesaro were down 2.33 percent at $142.50.