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Amylyx Pharmaceuticals Inc (NASDAQ:AMLX) shares surged Thursday after it announced that the U.S. Food and Drug Administration’s (FDA) Peripheral and Central Nervous System Drugs Advisory Committee voted in favor of approval for AMX0035, stating the evidence supports the effectiveness of the drug.
The drug is used to treat amyotrophic lateral sclerosis (ALS). The vote count saw seven of the committee vote yes and two vote no. However, panel recommendations are not binding but will be considered by the FDA when it reviews a New Drug Application (NDA) for AMX0035.
Amylyx said the decision was based on a review of all available evidence, including new analyses submitted for discussion at the September 7 meeting.
Following the announcement, a Citi analyst raised the firm’s price target on the stock to $48 from $35 per share, maintaining a Buy rating.
“Given the positive commentary from Billy Dunn, Office of Neuroscience Director and official signatory on the application at today’s panel, positive commentary during the panel discussion, and the positive vote in support of approval, we think approval by September 29 PDUFA date is now very highly likely, particularly in the context of the political pressure to approve new therapies for ALS,” said the analyst.
“Given that the vote was clear (7 Yes, 2 No), with four “No” to “Yes” flips vs. March 30th, we expect shares to recognize the vast majority of the value of an approval once shares are unhalted. We expect +$20 or more in upside tomorrow with shares trading towards high $30s/$40,” the analyst added.
Elsewhere, a Goldman Sachs analyst raised the price target to $40 from $22 but maintained a Neutral rating. He told investors that “there was overall agreement, in our view, that incremental analyses being considered since the first AdCom review were not based on new data. The vote is a reversal of the prior recommendation by the same AdCom panelists and we expect this second recommendation to supersede the first, paving the way for an approval on the updated September 29, 2022 PDUFA.”
“Following this, we adjust our model to reflect a 90% probability of approval of AMX0035 in ALS (vs. 75% prior) and anticipate a launch quickly after the approval given that AMLX has fully built its commercial infrastructure prior to the vote,” the analyst added.
Amylyx shares are up over 53% at the time of writing.
