Chinook Therapeutics Inc (NASDAQ:KDNY) shares plunged Tuesday after Muddy Waters released a short report on the stock, stating that it is highly unlikely that atrasentan, its lead product candidate, will be approved by the FDA.
The short-selling firm claimed atrasentan is inefficacious for chronic kidney disease and that its assessment concludes "that atrasentan has been shown to be harmful to patients' cardiovascular health."
Muddy Waters argues that in the largest available study, "atrasentan had no statistically-significant effect on advancement to end-stage renal disease" and showed "only a minor numerical difference between drug and placebo groups."
"AbbVie (NYSE:ABBV) and Chinook seem to have systemically manipulated research findings and presentation on atrasentan to obscure these trial results," allege Muddy Waters. "Even if atrasentan were efficacious and safe, it would be unlikely to gain approval because a competing drug, sparsentan, has received accelerated and exclusive orphan drug approval by the US FDA for IgA nephropathy, the condition targeted in Chinook's only Phase 3 trial, the ALIGN study."
The report pushed KDNY shares as low as $19.20 on Tuesday. At the time of writing, it is at $21.20, down over 9% from the previous session's close.