Chinook shares down about 6%, paring steep loss after Muddy Waters reveals short position in drugmaker (updated)

Chinook Therapeutics

16/05/2023 17:54

(New throughout, updates share price, adds background on
analyst ratings of Chinook)
       LONDON, May 16 (Reuters) - 
    Shares of Chinook Therapeutics Inc  KDNY.O  tumbled 18% and
then pared losses on Tuesday after short-seller Muddy Waters
said it was "highly unlikely" that the company's treatment for
chronic kidney disease would receive U.S. regulatory approval.
  
        The stock was last down 6.77% at $21.815 a share. But
immediately after Muddy Waters announced its short position, a
bet the stock would decline, Chinook shares fell as low as
$19.20, down 18% from the $23.40 close on Monday. Other
healthcare stocks also fell.
  
        Muddy Waters said Chinook's drug atrasentan has been
shown to be harmful to patients’ cardiovascular health and that
is was not producing the desired effect on chronic kidney
disease.
  
        There are six analysts with "buy" recommendations for
Chinook, according to Refinitiv data. Antonia Borovina, an
analyst at Bloom Burton Securities in Toronto, declined to
comment as she had not yet fully read the Muddy Waters report.
  
        Previously, Bloom Burton had said previously there was a
70% probability the FDA approves Chinook's atrasentan. The firm
has a "buy" recommendation and a price target of $51 on the
stock.
  
        There was no immediate comment from Seattle-based
Chinook. 
  
        The company earlier on Monday announced a partnership
with Ionis Pharmaceuticals Inc  IONS.O  to develop and
commercialize a  therapy for antisense oligonucleotide (ASO), a
rare, severe chronic kidney disease. 

 (Reporting by Herbert Lash, additional reporting by Nell
Mackenzie; Editing by David Gregorio)
 ((herb.lash@thomsonreuters.com; 1-646-223-6019; Reuters
Messaging: herb.lash.reuters.com@reuters.net))