Why Did Myovant Sciences Close in the Red on Tuesday?

Shares of Myovant Sciences (NYSE: MYOV) and Pfizer (NYSE: PFE) declined 25.1% and 1.5%, respectively, on Tuesday, on news that the U.S. Food and Drug Administration (FDA) found some flaws in labeling and/or post-marketing requirements for Myfembree.

The deficiency was found during a Supplemental New Drug Application (sNDA) review for Myfembree, which is used to treat moderate to severe pain associated with endometriosis.

The regulator did not provide any additional detail but mentioned that the revelation was not the final decision on the matter. Also, the application is still under review.

Last year in May, the companies had announced the FDA’s approval of the drug for treating heavy menstrual bleeding associated with uterine fibroids in premenopausal women.

Stock Rating

Following the news, Robert W. Baird analyst Brian Skorney reiterated a Buy rating on Myovant but lowered the price target to $20 (92.5% upside potential from current levels) from $30.

Skorney is pessimistic about the current update on Myfembree’s sNDA. Also, he opines that the companies may be issued a complete response letter from FDA.

Overall, the stock has a Moderate Buy consensus rating based on two Buys and one Hold. Myovant’s average price target of $21.50 implies 106.9% upside potential to current levels.

Insider Trading

Based on the recent corporate insider activity, sentiments seem to be Very Negative about the stock. This means that over the past quarter there has been an increase in insiders selling their shares of MYOV.

Conclusion

Though FDA’s finding may have been a small setback for the company, Myovant still has some drugs in the pipeline that may support its performance going forward.

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