Wedbush Cuts Fibrocell Science To Neutral

• Shares of Fibrocell Science Inc FCSC have risen by more than 97 percent year-to-date, reaching a high of $7.48 on August 5.
• Wedbush’s David M. Nierengarten has downgraded Fibrocell Science from Outperform to Neutral, while lowering the price target from $7 to $6.
• The downgrade follows the delay in the launch of the company’s RDEB candidate. Nierengarten also believes that there is limited upside to the stock over the next year.

Analyst David Nierengarten expressed surprised at the FDA requesting for additional animal toxicology data for Fibrocell Science’s candidate for the treatment of RDEB, “a painful blistering disease that leads to early death.” The request came in response to the IND filed by the company for its candidate, FCX-007, in July.

According to the Wedbush report, the FDA request comes as a surprise, given that NIH’s Recombinant DNA Advisory Committee did not raise any issues regarding the drug candidate and that this treatment would address a “severe unmet need” in RDEB.

FCX-007 is “an autologous fibroblast transfected ex vivo with a gene for type VII collagen (COL7); mutations in COL7 have been implicated in RDEB,” the report explained, while adding that the company intends to initiate the additional study requested for in 4Q15 and file the amended IND with the results from this study in 1Q16.

The company has also said that it now intends to begin Phase 1 and 2 trials for FCX-007 in 2Q16, which entails a six-month delay to the earlier expected timeline for the treatment. Nierengarten now expects the approval for the drug candidate to come by mid-2019.