The shares of drug maker Tesaro (TSRO) are falling with two possible headwinds cited by analysts as the potential culprit, namely the pricing of its niraparib treatment and the disappointing trial results of another drug in the same therapeutic space.

PRICING: Last night, Tesaro announced that Zejula, its oral, once-daily poly polymerase inhibitor, is now available by prescription in the U.S. with a Wholesale Acquisition Cost of $9,833 for a one-month supply at a dose of 200 milligrams once per day. The approved starting dose of ZEJULA is 300 milligrams once per day, but 200 milligrams/day was the most commonly administered dose over the course of the Phase 3 NOVA clinical trial, Tesaro noted in its announcement.

ABBVIE TRIAL: Additionally, AbbVie (ABBV) reported that its own PARP inhibitor cancer treatment, veliparib, failed to meet its primary endpoints in two Phase III trials involving squamous non-small cell lung cancer, or NSCLC, and triple negative breast cancer patients. The primary endpoint for the NSCLC patients was improvement in overall survival, while the primary endpoint for the breast cancer patients was "complete pathological response." Veliparib was combined with chemotherapy for the study.

PRICING REACTIONS: Citi analyst Robyn Karnauskas lowered her price target for Tesaro to $216 to reflect the pricing of Zejula. After speaking to management, the analyst expects the net price to be around $9,000, lower than her $10,000 estimate. The price, however, could position the company well for a good launch and future competition, Karnauskas tells investors in a research note. She keeps a Buy rating on Tesaro. Leerink analyst Seamus Fernandez also lowered his price target for Tesaro, to $158 from $186, noting that Zejula's pricing of $14,750/month represents a 7% premium to Clovis' (CLVS) Rubraca, but he estimates an average pricing of $10,350/month given the frequency of dose reductions. Fernandez reiterates a Market Perform rating on the shares.

TRIAL REACTIONS: The failure of AbbVie's drug should have "no impact" on Tesaro's niraparib, wrote SunTrust analyst Peter Lawson. Prior analysis has indicated that niraparib could be more effective than veliparib, the analyst stated. Moreover, niraparib's pairing with Merck's (MRK) iimmuno-oncolgy drug, Keytruda, could yield better results, since immuno-oncology drugs could more effectively combat NSCLC and potentially breast cancer as well, the analyst stated. Lawson, who expects Tesaro to report positive data from the trial at the American Society of Clinical Oncology conference in early June, kept a $235 price target and a Buy rating on the stock. Meanwhile, Geoffrey Porges, an analyst at research firm Leerink, said the results "confirm that veliparib has limited activity and is not competitive with other products in this class." He says that the drug now has no chance of success, but he only lowered his medium to long-term revenue outlook for AbbVie by 1% and cut his earnings estimate for it by just 1%-2%. Porges, who continues to expect AbbVie's profit to exceed expectations through 2020, trimmed his price target on the shares to $71 from $72 and kept a Market Perform rating on the stock. Similarly, Jefferies analyst Jeffrey Holford said that before the recent results he expected sales of veliparib to boost the company's revenue by less than 1.6% in the medium term. The analyst continues to predict that Abbvie will report "solid" Q1 results and he says that the company is developing "multiple" potential blockbuster drugs. Holford kept a $90 price target and a Buy rating on AbbVie shares.

PRICE ACTION: In morning trading, Tesaro fell over 9% to $134.19, while AbbVie was fractionally higher at $63.66 per share.