Ahead of the Bell: OvaScience shares tank
Shares of OvaScience Inc. tanked Wednesday before markets opened and after the company said federal regulators are questioning the status of its potential fertility treatment Augment.
The Cambridge, Mass., company said Tuesday after markets closed that the Food and Drug Administration was questioning Augment's status as a lower-risk form of a human cellular and tissue-based product.
The FDA told the company to file an investigational new drug application for the product, which would require rounds of clinical testing and could keep the treatment from reaching the U.S. market for years.
Augment is designed to improve egg quality and increase the success of in vitro fertilization, a procedure in which a woman's egg and a man's sperm are combined outside the body in a laboratory.
Wedbush analyst Zarak Khurshid said until now, discussions with the FDA "have centered on laboratory compliance and not the inner workings of the product." He expects a more detailed discussion of the product's underlying science and laboratory workflow to take place in the next few months.
Khurshid noted that the letter appears the FDA was "untitled," which "suggests it is not a final decision and not related to any compliance or safety issues with the product." He kept an "Outperform" rating on the stock, saying it is too early to write off the company, but said his $20 price target is under review.
OvaScience said it plans to talk to the FDA and will continue with clinical studies of Augment outside the United States.
The company's shares fell $5.47, or 38.4 percent, to $8.80 in pre-market trading. The stock has traded between $7.50 and $16 in the past 52 weeks, and closed Tuesday at $14.28, up more than 70 percent for the year.