What happened?
Calithera Biosciences (NASDAQ: CALA), a clinical biotechnology company, reported on Monday morning that telaglenastat, one of its main pipeline candidates, had failed a clinical trial. As a result, investors are selling shares in the company. As of 11:53 am EST on Monday, Calithera Biosciences shares fell 43%, after falling 49.9% today.
And
The clinical trial in question investigated the effectiveness of the combination of telaglenastate, an experimental cancer treatment, and cabozantinib, a cancer drug marketed by Exelixis, in patients with advanced or metastatic renal cell carcinoma (RCC). The primary endpoint of the study was the improvement in progression-free survival (the amount of time during and after treatment that the patient lives with cancer without worsening symptoms), compared to treatment with cabozantinib alone.
Unfortunately, the combination of telaglenastat and cabozantinib did not meet the main objective of the study. As a result of this result, Calithera Biosciences will reduce its workforce by approximately 35% and focus its financial resources on further studies in progress.
Image source: Getty Images.
What now
Biotechnology companies spend millions of dollars developing new drugs and it is always disappointing when one of these drugs is not effective in a clinical trial. It is even more complicated when the company in question has no medicine on the market and does not generate revenue, which is the case with Calithera Biosciences.
While the biotechnology company is chasing several other difficult targets, including cystic fibrosis, the pharmacist’s risk-reward profile didn’t look attractive even before today’s news. In other words, it may be better for investors to stay at a safe distance from these biotech stocks for now.