Why The Medicines Company's Share Price Got Sick Today

Image source: Getty Images.

What happened

The Medicines Company (MDCO) is down 11% at 12:39 p.m. EDT after its partner Alnylam Pharmaceuticals (ALNY -1.55%) announced yesterday afternoon that it's stopping development of one of its drug candidates, revusiran.

So what

The Medicines Company and Alnylam are partners for a different drug, PCSK9si, but both revusiran and PCSK9si use the same platform: RNA interference (RNAi) with a GalNAc, a type of sugar molecule, conjugate to knock down messenger RNA levels, which in turn lowers the amount of protein the messenger RNA encodes for.

Whether today's decline is justified depends on exactly why revusiran isn't helping patients. Alnylam noted that "the benefit-risk profile for revusiran no longer supported continued dosing" and that there was an "imbalance of mortality in the revusiran arm as compared to placebo."

None of the 18 deaths in the trial was classified as drug related, so it's not clear that there's really a side-effect issue; the imbalance could have been by chance alone. Even if there is a side-effect issue, revusiran is dosed at a much-higher level than PCSK9si, so even if the GalNAc-conjugate part of the drug that they share is causing a side effect, it might not affect patients taking PCSK9si. In fact, just yesterday, The Medicines Company said that in the most recent review of the data from its ongoing phase 2 trial "no material safety issue and, in particular, no drug-related neuropathy, elevation of liver enzymes or changes in renal function, has been observed."

On the efficacy side, it's possible that RNAi just doesn't work, but it's just as possible -- perhaps more so -- that revusiran's efficacy issue is disease-specific. Revusiran treats hereditary ATTR amyloidosis with cardiomyopathy, a condition for which there are no treatments, and it's not clear what knocking down the transthyretin protein that revusiran targets will do. PCSK9si knocks down the PCSK9 protein, which has already been shown to reduce cholesterol levels through antibody drugs targeting PCSK9.

Now what

It's understandable that The Medicines Company investors might sell first and ask questions later, but it's possible that today's drop ends up being an overreaction. Investors won't have to wait too much longer to see if PCSK9si has efficacy; interim data from the ongoing phase 2 trial will be presented at the American Heart Association meeting in the middle of next month, and final top-line data from the trial are expected before the end of the year.