Why Did TRAW Stock Slump 28% After Hours?

• The company emphasized that it maintains a portfolio of backup influenza antiviral compounds and is actively advancing alternative candidates.
• The Food and Drug Administration placed the company’s Investigational New Drug (IND) application for tivoxavir marboxil earlier this year. 
• According to data from Koyfin, both the analysts covering TRAW rate it a ‘Buy.’

Shares of Traws Pharma (TRAW) fell about 28% in after-hours trading on Friday after the company said it is delaying a key study for its experimental flu drug.

The company announced it is putting off a planned human study for its lead flu treatment, tivoxavir marboxil, after receiving feedback from the United Kingdom’s Medicines and Healthcare products Regulatory Agency (MHRA).

Under the trial, slated to begin this quarter, healthy volunteers would have received either the drug or a placebo and then been exposed to a controlled strain of the influenza virus. Researchers would then gauge whether the drug prevented an infection.

Traws Still Sees Strong Potential For Bird Flu Treatment

Traws said it is stepping back from the study for now while it works on addressing the regulators’ concerns. The company still believes the drug has potential, especially for treating or preventing serious bird flu infections.

“Tivoxavir marboxil demonstrated potent efficacy in three animal models of highly pathogenic avian influenza and a pharmacokinetic profile consistent with its use for bird flu treatment and prevention,” said the company’s Chief Science Officer, David Pauza. “The product candidate retains potential for emergency use in a bird flu outbreak and for prevention in high-risk populations.”

The company emphasized that it maintains a portfolio of backup influenza antiviral compounds and is actively advancing alternative candidates. The company has a cash runway extending into the first quarter of 2027.

“While we have had a setback in the development of our lead compound for influenza, the program continues to be a high priority,” said Chief Medical Officer Robert R. Redfield.

U.S. Clinical Trials Also On Hold

Meanwhile, clinical trials of the drug are also on hold in the U.S. The Food and Drug Administration placed the company’s Investigational New Drug (IND) application for tivoxavir marboxil on hold shortly after Traws filed it in mid-January. The hold stems from concerns about the toxicology data package, particularly around the potential to cause genetic changes.

In February, the company said it was preparing a response to address the regulator’s concerns, without which it cannot commence clinical trials.

How Did TRAW Retail Traders React?

On Stocktwits, retail sentiment around TRAW rose from ‘bearish’ to ‘neutral’ territory over the past 24 hours, while message volume improved from ‘extremely low’ to ‘low’ levels.

A Stocktwits user dismissed the after-hours drop as “overblown.”

According to data from Koyfin, both the analysts covering TRAW rate it a ‘Buy.’ The stock has an average 12-month price target of $5.5, implying a potential upside of over 300% from the stock’s last close.

TRAW stock has fallen 4% this year. 

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