MDCO – FDA Review Mixed – One Reviewer Very Negative On Cangrelor, The Other Recommends Approval – The briefing documents for Wednesday’s advisory committee were made available this morning. Despite the fact that the CHAMPION trial was successful and published in The New England Journal of Medicine with positive editorial comments, one FDA reviewer (Dr. Marciniak) comes to very negative conclusions and points out several flaws in the CHAMPION/PHOENIX study design that he believes refutes the Company’s conclusion. On the other hand, there are two reviewers – and the primary reviewer (Dr. Senatore) does recommend approval for the PCI indication, although he suggests a Complete Response for the Bridge to Surgery Indication. While we always knew the cangrelor data was mixed – it has been on a long, bumpy road – in our view, the company is well prepared and experienced at all Cardio-Renal AdCom committees. Nonetheless, a negative outcome is certainly possible and the bashing from Dr. Maciniak is surprising in light of the NEJM publication/editorial. However, the actual panel takes place Wednesday and the FDA is obviously relying on the advisory committee for advice on how to proceed, including the next steps for approval. It will likely be a contentious day. However, the agency could have rejected the drug without calling a panel – so there is some chance of a positive outcome. In our opinion, having gone from ~41 in January to ~32 now, the stock now reflects complete rejection of cangrelor. As a reminder, the company is due to introduce at least 3 new drugs – excluding cangrelor – globally in 2014-2015, resulting in CAGR of ~20%. At the current valuation, in our view, cangrelor’s failure is more than fully discounted.
MDCO is a BUY under 42 with a TARGET PRICE of 60.