What happened

Shares of clinical-stage biopharma Axovant Sciences (AXGT) fell by nearly 50% today after the company announced that its leading drug candidate, intepirdine, failed to meet its primary efficacy endpoint in any of three phase 2 trials evaluating the compound as a potential treatment for a specific type of dementia. As a result of the overwhelming clinical evidence accumulated to date, the company will no longer seek to develop the drug. 

Axovant Sciences announced a separate batch of phase 2 data from another drug candidate, nelotanserin, as a potential treatment for similar types of dementia. The drug candidate met its primary endpoint, but it was safety, not efficacy. Regarding improvement in symptoms, the biopharma noted that "no other trends of improvement were seen" on two distinct scales used by physicians nor in patient diaries. It will continue to develop nelotanserin.

As of 11:48 a.m. EST, the stock had settled to a 49.3% loss.

A finger tracking a falling chart on a touchscreen.

Image source: Getty Images.

So what

Prior to today, Axovant Sciences had three drugs in its pipeline: intepirdine, nelotanserin, and RVT-104. After embarrassing failures in the last several months, that's now been whittled down to just the latter two, although nelotanserin isn't progressing into late-stage trials with much confidence from Wall Street. Given that RVT-104 is being developed as a combination therapy with drugs aimed at similar neurodegenerative diseases, dementia and Alzheimer's, investors are beginning to wonder if the company's entire pipeline is worthless

Now what

Today's news from Axovant Sciences is the latest reminder that when it comes to understanding exactly how severe neurodegenerative diseases progress -- the first step to developing safe and effective treatments -- we have much to learn. Treatments aimed at targeting beta amyloid plaques have failed late-stage clinical trials en masse, while drug candidates aimed at treating specific symptoms of dementia haven't fared any better.

There's a growing body of evidence that Alzheimer's disease may be an extension of diabetes (and is increasingly being referred to as "type 3 diabetes"), but the theory is still in the earliest stages of experimentation. Investors interested in potentially groundbreaking treatments for neurodegenerative diseases will need to remain patient for now -- and probably on the sidelines.