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Here's Why Ionis Pharmaceuticals Stock Got Slammed Today

What happened

Shares of Ionis Pharmaceuticals (NASDAQ: IONS) closed down 21.7% on Tuesday after the biotech's partner Roche Holding (OTC: RHHBY) announced plans to stop treating patients with tominersen in a late-stage clinical trial testing the duo's drug to treat Huntington's disease, a progressive brain disorder.

So what

After taking an interim peek at the data from the study, the independent data-monitoring committee recommended patients stop receiving the drug due to the benefit/risk profile of tominersen. The companies noted there were no new or emerging safety signals identified in the patients taking tominersen, which implies the problem likely has to do with lower-than-expected efficacy.

Roche plans to follow the patients in the study, without giving them additional doses of tominersen or a placebo, but investors should assume there's a very, very small chance the final data might show a positive effect given the recommendation of the independent data monitoring committee.

Image source: Getty Images.

The companies also paused dosing in the extension study in which patients who were in the late-stage study could continue receiving tominersen or be switched to the drug if they were in the placebo group.

Shares of Wave Life Sciences (NASDAQ: WVE), which is testing multiple Huntington's disease drugs in early-stage development, fell 21% on Tuesday as investors worried about the ability to treat the disease.

Now what

Without a doubt, stopping dosing of tominersen is bad news for Ionis. Huntington's disease is an unmet need with huge potential if a company can find a drug to treat the genetic disease.

But Ionis has a well-stocked pipeline of drugs, including five other drug programs in phase 3 development, and 25 phase 2 clinical trials testing various drugs for different diseases. Some of them will likely follow the fate of tominersen -- drug development isn't perfect, after all -- but Ionis still has enough shots on goal to make it a biotech worth holding.

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Brian Orelli, PhD owns shares of Ionis Pharmaceuticals. The Motley Fool owns shares of and recommends Ionis Pharmaceuticals. The Motley Fool has a disclosure policy.


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