Reata sinks on Friedreich’s ataxia update but Goldman remains positive

Goldman Sachs analyst Madhu Kumar raised the firm’s price target on Reata Pharmaceuticals to $76 from $73 and keeps a Buy rating on the shares post the company’s Q2 results. The stock in afternoon trading is down 32% to $24.14. Regarding omaveloxolone, management noted that during the mid-cycle new drug application review, the FDA raised as points of discussion the strength of the efficacy of the Nrf2 activator in Friedreich’s ataxia despite not being any significant clinical safety issues to date, Kumar tells investors in a research note. Despite the negative market reaction to this update, the analyst believes the additional provided data, combined with omaveloxolone’s prior efficacy profile in Friedreich’s ataxia, an orphan disease with no approved therapy, create a favorable risk/benefit profile for the Nrf2 activator. He remains positive ahead of the upcoming advisory committee and models peak sales of $2.8B.

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