Shares of NewLink Genetics Corp. plunged Tuesday after the company said it would continue a cancer drug study, disappointing Wall Street's hope for early completion.
The drug candidate, called algenpantucel-L, is aimed at treating pancreatic cancer and has received special designations from the Food and Drug Administration allowing for quicker development and a speedy review process. In a statement late Monday, the biotechnology company said it would continue the mostly complete study, unmodified.
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The announcement raised concern that the study may not be going well. Specifically, the company did not meet a prespecified threshold on survival rate that would have allowed it to end the study early.
Shares of the Ames, Iowa-based company fell $13.53, or 26 percent, to $38.61 in midday trading Tuesday.
"We have indicated that if IMPRESS (the study) does not stop at the interim, investors are likely to assume that this is a failed trial," said Cantor Fitzgerald analyst Mara Goldstein, in a note to investors.
But, Goldstein said the final goal of the study is still achievable and likely to be clinically and commercially relevant should there be a clinical success.
Meanwhile, Jefferies analyst Biren Amin said the current results have left him more cautious on the potential for the final analysis.