NewLink Genetics Corp. Stock Drops 28% On Mid-stage Results For Melanoma Drug

NewLink Genetics Corp. shares dropped as much as 27.7% in morning trade Tuesday after the company released interim results for a phase 2 trial for advanced melanoma. The company's indoximod was being tested in combination with Merck's Keytruda. NewLink Genetics said that data on 60 patients found an objective response rate of 52% and a disease control rate of 73%, with rates slightly higher among patients with non-ocular melanoma, at a 59% objective response rate and an 80% disease control rate. Though the company described the results -- which it is presenting at the American Association for Cancer Research's annual meeting on Tuesday -- as impressive and emphasized that the cancer drug combination was well tolerated overall, investors questioned how much of an effect the company's drug had relative to Merck's Keytruda alone and compared NewLink Genetics negatively to Incyte Corp. , which is also developing an IDO inhibitor and is working with Merck. NewLink Genetics shares were valued at $18.40 as of Tuesday morning. The company's shares have surged 63.8% over the last three months, compared with a 3.8% rise in the S&P 500 .