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Shares of Edge Therapeutics, Inc. EDGE lost almost 92% after the company announced disappointing results from a phase III study, NEWTON 2 on lead pipeline candidate, EG-1962.
Edge Therapeutics’ stock has lost 86.7% in the last three months compared with the industry’s decline of 4.2%. The loss of 92% in a single day due to failure of the study has resulted in the stock’s underperformance.
EG-1962 is being evaluated in adults with aneurysmal subarachnoid hemorrhage (aSAH).
NEWTON 2 study compared the efficacy and safety of EG-1962 (nimodipine microparticles) to standard of care oral nimodipine in adult patients with aSAH. Patients enrolled in the experimental arm received a single 600 mg intraventricular injection of EG-1962 plus placebo capsules or tablets for up to 21 days. Patients in the active comparator arm received a single dose of intraventricular normal saline and up to 21 days of oral nimodipine capsules or tablets. The primary outcome measure was the proportion of patients with a favorable outcome of 6 to 8 on the Extended Glasgow Outcome Scale at the day 90 visit.
A pre-specified interim analysis performed on data from the day 90 visit of the first 210 subjects randomized and treated in the study demonstrated a low probability of achieving a statistically-significant difference compared to the standard of care in the study’s primary endpoint if the study is fully enrolled.
Hence, the independent Data Monitoring Committee (“DMC”) recommended that the study be stopped based on its conclusion as it has a low probability of meeting its primary endpoint. The DMC, however, reported that there were no safety concerns regarding EG-1962.
Consequently, Edge Therapeutics has decided to discontinue the NEWTON 2 study based on DMC’s recommendation.
Moreover, the company will reduce the size of its workforce, in order to preserve cash resources, which were $88.1 million as of Dec 31, 2017 due to the failure of the late-stage study.
The candidate was granted Fast Track designation by the FDA. It also enjoys orphan drug designation in the United States and Europe.
The candidate was the company’s lead candidate and the failure of the study puts a question mark on its scope of operations. Since EG-1962 is the company’s most advanced candidate, as the others are still in infancy stages in its pipeline, Edge Therapeutics seems to have lost its edge for now with this failure.
Stocks That Warrant a Look
Some top-ranked stocks in the healthcare industry are Regeneron Pharmaceuticals REGN, Ligand Pharmaceuticals LGND and Enanta Pharma ENTA. While Regeneron sports a Zacks Rank #1 (Strong Buy), Ligand and Enanta Pharma carry a Zacks Rank #2 (Buy), each. You can see the complete list of today’s Zacks #1 Rank stocks here.
Regeneron’s earnings per share estimates have moved up from $18.65 to $18.68 for 2018 in the last 30 days. The company pulled off a positive earnings surprise in three of the last four quarters, with an average beat of 9.15%.
Ligand’s earnings per share estimates have moved up from $3.78 to $4.20 and from $4.75 to $5.32 for 2018 and 2019, respectively, over the last 30 days. The company delivered a positive earnings surprise in three of the trailing four quarters, with an average beat of 24.88%.
Enanta Pharma delivered a positive earnings surprise in three of the last four quarters, with an average beat of 373.1%.
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