ChemoCentryx Stock Plummets 70% on FDA Drug Concerns

Shares of ChemoCentryx (CHR) cratered by more than 70% in heavy trading after the U.S. Food and Drug Administration (FDA) raised serious questions about the company's flagship drug candidate, avacopan. The dramatic sell-off erased hundreds of millions in market capitalization, reflecting investor panic over the future of the treatment for a rare autoimmune disease.

The catalyst for the collapse was the release of ahead of an advisory committee meeting. The agency's review of avacopan, intended for patients with ANCA-associated vasculitis, was starkly negative, with regulators noting they had previously communicated concerns to the company. The documents stated the drug's study design raised 'questions about the interpretability of the data to define a clinically meaningful benefit.'

Wall Street reacted swiftly and brutally to the regulatory uncertainty. The stock's precipitous fall was driven by exceptionally high trading volume as investors digested the FDA's critical assessment. The situation worsened after the advisory committee meeting, which resulted in a split vote. While the panel voted 10-8 that the drug's safety profile was adequate, it was deadlocked 9-9 on whether the .

This mixed verdict from the panel amplified investor fears, suggesting a difficult path to approval. Although the FDA is not bound by the committee's recommendation, the lack of a clear consensus endorsement is a significant hurdle. Analysts were quick to downgrade the stock and slash price targets in response to the news.

The extreme price movement underscores the high-stakes nature of biopharmaceutical development, where a company's fortunes can hinge on the outcome of a single drug's regulatory review. For ChemoCentryx, the about avacopan created a crisis of confidence, leaving the company's future prospects in question pending the agency's final decision.