Biotech stock Revolution Medicines collapsed Monday after unveiling test results for an experimental cancer treatment that were "at best, in line with expectations," according to one analyst.
Revolution stock crashed 34.4% to 18.36 on the stock market today.
Overall, roughly 38% of lung cancer patients and 20% of the pancreatic cancer group responded to the treatment dubbed RMC-6236. Needham analyst Ami Fadia says the results in lung cancer patients were on par with expectations and could improve. But the results in pancreatic cancer missed forecasts.
"We do expect that greater time on treatment at higher doses could results in a higher overall response rate, but we do not see the same potential for improvement as for non-small cell lung cancer," she said in a report to clients.
The biotech stock touched its lowest point since June 2022.
Pancreatic Cancer Results Plague The Biotech Stock
The results in both cancers include unconfirmed responses, Leerink Partners analyst Jonathan Chang said in a report. Excluding those, 30% of lung cancer patients and 10.9% of pancreatic cancer patients responded to the treatment.
But, he noted, at the median patients received the treatment for 3.1 months to 3.3 months. Hence, it's premature to determine how durable the drug could ultimately prove. Further, the drug appeared safe and tolerable, with safety results meeting expectations.
Chang kept his outperform rating on the biotech stock.
"We see the data as fundamentally positive and believe they demonstrate RMC-6236 is (effective) and safe," he said. "However, we wonder if the data are good enough relative to investor expectations heading into the presentation."
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