What happened?
Calithera Life Sciences (NASDAQ: CALA), a biotech company in a clinical stage, reported Monday morning that telaglenastat, one of its leading candidates for pipelines, crashed in a clinical trial. As a result, investors sell shares in the company. Monday at 11:53 AM EST, Calithera Biosciences stocks fell 43% after falling 49.9% earlier today.
Approximately
The relevant clinical trial demonstrated the efficacy of the combination of telaglenastat, an experimental cancer treatment, and cabozantinib, a cancer drug administered by Exelixis, in patients with advanced or metastatic renal carcinoma (RCC). The primary endpoint of the study was improvement in progression-free survival (the amount of time during and after treatment that the patient lives with cancer without experiencing worse symptoms), compared to treatment with cabozantinib alone.
Unfortunately, the combination of telaglenastat and cabozantinib does not meet the primary endpoint of the study. As a result of this outcome, 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 when one of these drugs is not effective in a clinical trial. This is another setback if the company in question has no medicine on the market and no revenue, which is the situation for Calithera Biosciences.
While the biotechnology venture is pursuing other difficult targets, including cystic fibrosis, the drugmaker’s risk-reward profile does not seem convincing before today’s news. In other words, it may be best for investors to keep a safe distance from this biotechnology stock for now.