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Which way for TherapeuticsMD?

April 21, 2017

TherapeuticsMD Inc TXMD has waned as much as 40 percent since April 7, when the company received an FDA letter noting deficiencies in the new drug application for vulvovaginal atrophy treatment, Yuvvexy (TX-004HR). The regulatory agency said the deficiencies preclude talk of the drugs’ labeling and post-marketing commitments.

The news and subsequent price action has inspired drastically diverse reactions from the stock’s bears and bulls.

The Bulls

“We interpret this sharp decline in TXMD’s share price as an overreaction to unspecified NDA deficiencies that we view as likely due to technical aspects of the CMC section,” Oppenheimer’s Jay Olson wrote in a Tuesday note.

He suspected that the FDA letter pertained to earlier, non-clinical questions regarding mere analytical methods and, if correct, foresees a two- to three-month delay in drug approval. Details on the deficiencies are expected prior to the May 7 PDUFA date.

“We believe the TX-004HR NDA deficiencies have no impact on TX-001HR,” Olson wrote. “Therefore, we are surprised the market has discounted TXMD shares below our $7 valuation for TX-001HR alone. We see this weakness in TXMD shares as a buying opportunity with significant upside if the NDA deficiencies can be resolved in a timely manner, as we expect.”

The firm maintained an Outperform rating on the stock with a $15 price target.

Similarly, Cowen Group defended the stock and assured that the regulatory interference will effect, at worst, a minor delay.

The Bears

But Adam Feuerstein, biotech reporter at The Street, shared a different take on the issue.

all but confirms FDA rejection of TX-004HR expected on May 7.

He defended his analysis with trends seen in FDA regulatory activity; namely, deficiencies connote rejection.

@adamfeuerstein Your comment makes no sense. Please explain further otherwise you are just cannon fodder for short sellers.

@ssvirsky “Deficiencies.” Plural. NDAs with deficiencies are rejected. is telling you TX-004HR will be rejected on or before May 7.

http://bit.ly/2owP51f

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