Shares of VRDN stock collapsed Tuesday after Viridian Therapeutics unveiled the results of its chronic treatment for thyroid eye disease.
Patients with thyroid eye disease experience inflammation behind the eyes, causing them to bulge. That bulging is called proptosis. Over six weeks, patients had a 1.5 millimeter to 1.8 millimeter reduction in proptosis, measured by an instrument called an exophthalmometer. Using an MRI, the reduction was 1.5 millimeters to 2.6 millimeters, on average.
But Viridian didn't unveil detailed information about how placebo recipients responded, causing VRDN stock to crash 16.4%. On today's stock market, shares closed at 20.50, after earlier hitting their lowest point since November.
Analysts remained bullish on Viridian's chances, however.
"We think this likely isn't a meaningful issue because baseline proptosis values were meaningfully higher for placebo subjects; however, it likely would have been more straightforward to just have reported the (placebo response) value," Wedbush analyst Laura Chico said in a note to clients.
VRDN Stock: Rivaling Horizon
Viridian hopes to rival Horizon Therapeutics, which sells the only treatment for thyroid eye disease. Amgen is now working to acquire Horizon.
Horizon also tested its drug, Tepezza, in patients who chronically experience thyroid eye disease. At six weeks, Tepezza recipients had a 1.2-millimeter reduction in proptosis, Chico said.
"While we caveat this is a cross-(study) comparison, it seems encouraging nonetheless," she said.
She has an outperform rating on VRDN stock, but cut her price target to 45 from 48.
The patient populations differed somewhat between Viridian's and Horizon's studies, Needham analyst Serge Belanger said in his note to clients. Further, Horizon's study was significantly bigger at 62 patients vs. just 18 for Viridian.
But he kept his buy rating and 47 price target on VRDN stock.
Updated Pivotal Study
Viridian also announced plans to eliminate one of the dosing regimens from its pivotal study. It will no longer test an eight-dose regimen. Instead, it will pare that back to five doses.
"Management reinforced the decision was not due to safety or enrollment concerns and stepping back," according to Chico, the Wedbush analyst. "We see this as a more clear-cut way to differentiate between VRDN-001 and Tepezza."
She noted there are plenty of catalysts upcoming for Viridian, including data from a study of an under-the-skin shot for VRDN-001 and the results of the pivotal study, expected in mid-2024.
The VRDN stock dive Tuesday "is more of a function of the current biotech environment and messaging around the update, rather than fundamental data issues," she said.
Follow Allison Gatlin on Twitter at @IBD_AGatlin.