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What: Following news that its timeline to file for Food and Drug Administration approval of its lead and only drug candidate needs to be pushed back from the first quarter to midyear, shares in Puma Biotechnology are tumbling 22.6% at 12:00 p.m. ET today.
So what:Neratinib is being developed as a treatment for breast cancer, and after studies showed it slightly improved the likelihood of disease recurrence in early-stage breast cancer patients who had undergone surgery and one year of adjuvant treatment with Roche Holdings Herceptin,the company had planned to file it for FDA approval in the first quarter.
In trials, the disease-free survival rate in the neratinib arm of the study was 93.9% and the rate in the placebo arm of the study was 91.6%. That's not a huge improvement, but it was a big enough difference to support putting the drug in front of regulators.
However, discussions with the FDA resulted in the agency asking Puma Biotechnology to redo its statistical analysis under a new framework and that means that Puma Biotechnology won't make its first-quarter filing target.
That's not what investors wanted to hear, but Puma Biotechnology shareholders can take some solace in the fact that the new framework requested by the FDA doesn't appear to materially alter the rate of improvement in this indication for neratinib. According to the company, the new methodology results in an invasive disease-free survival rate of 94.2% for neratinib and 91.9% for placebo.
Now what: Previously, high incidence rates of severe diarrhea in neratinib patients had many people questioning the market potential of this drug. Puma Biotechnology responded to those concerns with a study evaluating the co-administration of anti-diarrhea medicine, and that restored investor hopes that neratinib could still make its way to market in this large and important indication.
However, today's revelation means that investors need to reassess their own personal timelines for owning and holding on to shares in this company. The delay doesn't suggest any greater likelihood of a FDA no-go when it finally does review neratinib, but it does mean that it could be months longer before investors find out if Puma Biotechnology is given a green light and if it has a potential winner on its hands.
The article Why Puma Biotechnology's Shares Are Crashing Today originally appeared on Fool.com.
Todd Campbell has no position in any stocks mentioned. Todd owns E.B. Capital Markets, LLC. E.B. Capital's clients may have positions in the companies mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
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