For two companies, Ascendis and Piramal, findings from the Food and Drug Administration (FDA) directly impact short-term performance of stocks.
At the beginning of the pandemic, some in-person inspections of drug manufacturing facilities were paused by the FDA – especially those conducted internationally. Over the past few months, these “Good Manufacturing Practices” (GMP) evaluations have resumed. In Digwal, India, the FDA conducted one of these physical surveys from March 27th to the 31st at a factory owned by Piramal Pharma LTD. The FDA found that the building’s operations were compliant as there were no “form-483 observations” – which represent failures to comply with industry standards.
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On the business side of things, this was welcomed news by the manufacturer. After the inspection results were made public, the corporation’s stock grew over 6% on April 3rd. Piramal Pharma has a 5-year loss of almost 75%* but the short-term boost and the positive report from the FDA could indicate things are looking up for the international company.
Also on Monday, April 3rd, a report from the FDA had the opposite impact for another company in the medicinal field, a Denmark company called Ascendis Pharma. The US federal agency reported that “deficiencies” were observed when studying the application of a possible treatment, developed by Ascendis, for a condition known as hypoparathyroidism. The pending drug under scrutiny is named TransCon PTH. Although the report did not go into detail regarding the deficiencies, the FDA did note that the findings were not reflective of a “final regulatory decision.” The company’s stock, which is traded on the NASDAQ, fell over 30% in a day* after the news became public on Friday March 31st. Over the past years, however, Ascendis has posted a gain of almost 25% over that last five years*.
* as of 4:30 PM EST on 4/3/23
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Until Next Time,
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**Written by Benjamin Derge, Financial Planner, ChFEBC℠ The information has been obtained from sources considered reliable but we do not guarantee that the foregoing material is accurate or complete. Any opinions are those of Benjamin Derge and not necessarily those of RJFS or Raymond James. Links are being provided for information purposes only. Expressions of opinion are as of this date and are subject to change without notice. Raymond James is not affiliated with and does not endorse, authorize, or sponsor any of the listed websites or their respective sponsors.
Sources: IRS.gov , TSP.gov
