What happened

Shares of GTx (NASDAQ:GTXI) were obliterated today, falling as much as 92.9% by 3 p.m. EDT, after the pharma company announced that its only drug candidate failed a mid-stage clinical trial. Enobosarm, being evaluated as a potential treatment for stress urinary incontinence, did not meet its primary endpoint in a phase 2 trial

The primary endpoint was to prove statistically superior to a placebo for patients who witnessed a more than 50% reduction in incontinence episodes per day after 12 weeks. The results: 58.9% of patients taking the 3-milligram dose of enobosarm and 57.7% of patients taking the 1-milligram dose achieved the mark. However, that was not a statistically significant improvement compared to a placebo, with 52.7% of patients in that arm of the study meeting the endpoint.

As of this writing, the stock had settled to a 92% loss.

A disappointed-looking man in a lab coat sitting at a table with lab equipment.

Image source: Getty Images.

So what

The near-total collapse of GTx stock today is a reminder that being a one-trick pony in pharma is risky. Are there any reasons for optimism going forward?

Well, the company ended June with $45.7 million in cash, which is roughly where the market has set the market cap following the over 90% drop in share value. That presumably will now be used to advance a new class of preclinical drug candidates called selective androgen receptor degraders (SARDs). They're being studied as a potential treatment for castration-resistant prostate cancer.

GTx said the first preclinical drug candidates could be ready for studies by the end of 2018, which could set the stage for investigational new drug (IND) applications. That means phase 1 clinical trials of the first SARDs wouldn't begin until late 2019 or early 2020 at the earliest, assuming all goes well.

Now what

Today is very disappointing for shareholders who were hoping for a successful outcome for enobosarm. And without any other drugs in the pike and the next clinical drug candidates still at least one year away from entering early-stage trials, there's not much of a reason for investors to own GTx stock in their portfolios right now. Investors may want to try one of these top biopharma stocks instead.