NewLink Genetics Corporation (NASDAQ:NLNK)
On Monday May 9, 2016 in after-hours trade share of NewLink Genetics tanked by 35% after the company had announced the failure of its phase 3 trial in treating patients with pancreatic cancer. Th phase 3 trial was known as the IMPRESS trial. This phase 3 trial had recruited a total of 722 patients with pancreatic cancer. The phase 3 trial failed to meet on the primary endpoint of the study, which as overall survival.
In addition to failing to meet on the primary endpoint, the company's vaccine treatment known as algenpantucel-L failed to improve patient's clinical outcome compared to the placebo drug. NewLink's vaccine treatment wasn't even close to achieving the primary endpoint of the study. This makes investors wonder, does the company still hold some type of a future with its current pipeline?
What Overall survival measures is how long a patient lives while on the company's treatment compared to a placebo drug instead. The goal is to see if the new treatment can keep the patient alive longer than the current standard of care treatment. Patients on NewLink's treatment lived for a median of 27.3 months, compared to patients taking a placebo who lived a median of 30.4 months. that means that patients who took NewLink's treatment fared worse, than those who took the placebo compound. Patients who took the placebo lived longer by 3.1 months, therefore the trial failed to reach statistical significance.
The company does have another drug in the pipeline known as the IDO inhibitor platform. It is not the same as the algenpantucel-L vaccine. Therefore, there is a chance that the company may recover if it can advanced this new compound in the pipeline. There are several readouts for the IDO program in 2016 which may turn things around. The company has enough cash on hand to continue to develop these programs in the pipeline. NewLink Genetics has $178 million cash on hand. The company anticipates that it will be enough cash to last for at least 2 years without the need to dilute any further.
Tetraphase Pharmaceuticals Inc. (NASDAQ:TTPH)
On Thursday May 12, 2016 Tetraphase had a rough day. During the trade session the company's stock tanked by 7% because of a a weak biotech sector. Although, things quickly got worse because the company's share price tanked further in after-hours trading. This happened when the company announced that the FDA had bad news for its drug candidate eravacycline. The FDA stated that Tetraphase would have to run an additional phase 3 trial if it wants to seek approval for its IV drug.
The FDA now wants the company to run another phase 3 trial. There are two problems with having to do this. For one, phase 3 trials are very expensive so it will take a lot of cash to run the trial. Secondly, this postpones approval for at least another two years. Thus the reason why many investors sold out of the stock, because they don't want to wait two years to see if the FDA will approve the drug or not.The trial itself won't be too bad as the company anticipates it will take at least one year to run. Tetraphase believes that it will begin the trial as early as the fourth quarter of 2016, and can potentially have results by the fourth-quarter of 2017.
While a nice goal to have there is no guarantee that the company will be able to recruit that quickly for the trial. Adding in delays and longer patient recruitment time the trial may take even longer. even before this horrendous news, shares of Tetraphase have been down by 55% year to date. Eravacyline must succeed because the other clinical candidates in the pipeline are only in the pre-clinical stage. That means it will be at least 6 to 7 years before those even make it to phase 3 trials, and that's if they are successful. Things must turn around soon otherwise the share price will fall further.