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What happened?
Calithera Biosciences (NASDAQ: CALA), a clinical-stage biotech company, reported Monday morning that telaglenastat, one of its main candidates in the pipeline, has collapsed in a clinical trial. As a result, investors sell shares of the company. At 11:53 a.m. EST on Monday, Calithera Biosciences’ stock is down 43% after dropping 49.9% earlier today.
So what
The clinical trial in question examined the effectiveness of the combination of telaglenastat, an investigational treatment for cancer, and cabozantinib, an anticancer drug marketed by Exelixis, in patients with advanced or metastatic renal cell carcinoma (CRC). The primary endpoint of the study was improvement in progression-free survival (the time during and after treatment that the patient lives with cancer without experiencing any worsening of symptoms), compared to treatment with cabozantinib alone.
Unfortunately, the combination of telaglenastat and cabozantinib did not meet the primary endpoint of the study. As a result, Calithera Biosciences will reduce its workforce by approximately 35% and focus its financial resources on other ongoing studies.
Image source: Getty Images.
Now what
Biotech companies spend millions of dollars developing new drugs, and it’s always disappointing that one of those drugs doesn’t prove to be effective in a clinical trial. It is even more of a failure when the company in question has no drugs on the market and does not generate any income, which is the case with Calithera Biosciences.
As the biotech company tackles several other tough targets, including cystic fibrosis, the drugmaker’s risk-reward profile did not look convincing even before today’s news. In other words, it might be better for investors to keep a safe distance from this biotech action for now.
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