Evoke Pharma Inc. (NASDAQ: EVOK) stock tumbled to over 5-year low of $0.76 on Thursday. Investors remained concerned on the future of the company’s Gimoti nasal spray, which offers quick relief for diabetic women whose stomachs are too slow to move food to the intestines, a condition called gastroparesis.
The stock has turned to the red territory since Tuesday when the Food and Drug Administration dismissed Gimoti, a version of the decade-old oral drug metoclopramide, as the device won’t deliver reproducible dosing. Traders were unhappy with the complete response letter that followed the multi-disciplinary review letter earlier in March 2019.
The March letter cited three issues namely chemistry and quality control, differences in sex-based efficacy, and the drug’s maximum concentration data not being within the parameters for bioequivalence. However, the complete response letter stated only two issues, the drug/device product quality and the clinical pharmacology data.
In a statement, the company said it expected to meet with the federal agency for understanding the requirements for approval and remained committed to bringing its novel nasal formulation of metoclopramide to patients.
The recent letter issues were related to low concentrations in a group of study participants that represented less than 5% of the doses administered in a pharmacokinetics study. The agency recommended a root cause analysis to determine the origin of the pharmacokinetics variability, as well as strategies to mitigate the issue.
Diabetic gastroparesis is a gastrointestinal disorder afflicting millions of sufferers worldwide, in which the stomach takes too long or fails to empty its contents resulting in serious digestive system symptoms. Metoclopramide is the only product currently approved in the United States to treat gastroparesis and is currently available only in oral and intravenous forms.
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In the recent fourth-quarter, Evoke Pharma reported a wider loss due to loss from the change in fair value of warrant liability as well as other expenses. It doesn’t have any revenue for the quarter while total operating expenses fell by 33% driven by lower research and development expenses.
As of December 31, 2018, the company’s cash and cash equivalents were about $5.3 million. On the other hand, the company had total current liabilities of $1.63 million and total stockholders’ equity of $4.03 million.
Meanwhile, market experts believe that Gimoti nasal spray will be successful in reaching the market and is expected to provide a suggested path forward for the management. Also, analysts considered that the shares are undervalued at the current price levels. Majority of the analysts recommended a “buy” rating while expecting the stock to reach $8 per share in the next 52 weeks.
Shares of Evoke Pharma opened lower on Thursday and is trading in the red territory. The stock has fallen over 62% in the past year and over 67% in the past three months.