Shares of OncoMed Pharmaceuticals Inc. (NASDAQ:OMED) closed the day down 3.74% to $3.86 per share. The plunge came after both JMP (NYSE:JMP) and Piper Jaffray (NYSE:PJC) downgraded the company’s rating.
Both firms gave the same reason for the cut: OncoMed announced that their lung cancer drug, Tarextumab, didn’t meet endpoints in Phase 2 of its clinical trial.
The results of the clinical trial of the cancer drug with chemotherapy showed little difference from the combination of chemotherapy and placebo.
"Small cell lung cancer is a very difficult-to-treat disease and unfortunately, tarextumab did not show benefit over placebo in this Phase 2 trial," said Paul J. Hastings, OncoMed's Chairman, and CEO.
Furthermore, OMED gave another factor for the rating cut. The pharmaceuticals company also announced that the enrollment of brontictuzumab to Phase 1, a drug for colorectal cancer, has been discontinued.
The company said that it is going to “undertake a comprehensive portfolio prioritization review immediately.”
Things will not look too good for the drug developer, if they don’t put their “focus on rebuilding the research and development pipeline in a capital-efficient manner,” Leerink Partners analysts Michael Schmidt wrote in a note.
Currently, OncoMed has six drug candidates being evaluated in ten clinical studies. All of them are either in progress or have begun enrolling patients. 2017 will not be a good year for the company if a few more its drugs follow the trend of its predecessors.
OncoMed’s stock has lost 50% of its value since the beginning of 2017.
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