Shares of Achillion Pharmaceuticals (NASDAQ: ACHN) were down 11.8% as of 3:01 p.m. EST on Wednesday. The biotech continued to feel the impact from its interim clinical update for lead candidate ACH-4771, provided after the market closed on Monday. Achillion’s decision to not move forward with the drug as a monotherapy in treating paroxysmal nocturnal hemoglobinuria (PNH) disappointed investors .
Between the big drop for Achillion stock prior to the interim update on Monday and the following two days of declines, the biotech has lost more than 40% of its market cap this week. With that kind of response from investors, you might think that Achillion’s pipeline news was all bad. But that’s not the case.
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Although Achillion isn’t planning to advance ACH-4771 to a late-stage study for treating PNH as a monotherapy, the company saw potential for the drug as part of a combination therapy. ACH-4771 in combination with Alexion Pharmaceuticals ‘ Soliris appeared to increase hemoglobin, lower the number of immature red blood cells without a nucleus (known as reticulocytes), and resulted in no transfusions for patients on the combo therapy.
Achillion also thinks that another pipeline candidate, ACH-5228, could prove to be a better monotherapy for treating PNH. The company plans to begin a phase 1 clinical trial of the experimental drug in the first quarter of 2019.
In addition, Achillion stated that the initial data from a phase 2 study of ACH-4771 in treating C3 glomerulopathy (C3G) were promising. C3G is a rare chronic kidney disease that currently has no approved treatments.
It’s pretty much a wait-and-see game for Achillion. Clearly, investors had hoped the biotech would have overwhelmingly positive news for ACH-4771 in both PNH and C3G. That didn’t happen, but there are more results to come.
In the meantime, Achillion remains a highly speculative stock with a significant amount of risk. There’s no guarantee that ACH-4771 or ACH-5228 will prove successful. Investors can definitely find other biotech stocks with more attractive risk-reward propositions.
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