What happened

Shares of Mirati Therapeutics (NASDAQ:MRTX), a high-flying biotech focused on cancer, plunged 16% as of 11:35 a.m. on Monday. The drop is a response to the release of clinical data from a phase 2 trial that failed to impress.

So what

Mirati presented data from its ongoing phase 2 trial that is testing its compound sitravatinib in combination with Bristol-Myers Squibb's (NYSE:BMY) blockbuster drug Opdivo as a possible treatment for lung cancer.

Here's an overview of the key takeaways from the data:

  • Out of 56 patients, 16 showed a partial response (PR) or complete response (CR) rate. However, that number might be viewed as overly generous since two of those patients are unconfirmed and are still awaiting confirmation, and another five are unconfirmed and will never be confirmed. If you adjust for those groups, then only nine patients from the study showed a confirmed PR or CR, which could be viewed as disappointing.
  • In addition, 45 of the 56 patients showed tumor regression.
  • The combination was well-tolerated and the majority of adverse events were grade 1 or 2 (mild and moderate).
  • The company held an end-of-phase-2 meeting with the Food and Drug Administration and plans on moving forward with a phase 3 trial.
Scientist looking through a microscope.

Image source: Getty Images.

Here's the commentary that Dr. Charles Baum, Mirati's CEO, shared with investors:

There are limited treatment options for NSCLC [non-small-cell lung cancer] patients whose tumors progress following checkpoint inhibitor therapy. Based on the data from our ongoing Phase 2 clinical trial we believe that the planned Phase 3 clinical trial will demonstrate a greater response rate and overall survival compared with the historical clinical outcomes for late stage NSCLC patients treated with single-agent docetaxel, where response rates range from 7-11%. The combination of sitravatinib and nivolumab has continued to show it is well tolerated with manageable side effects. We remain encouraged by the frequency and duration of the responses observed to date in this patient population with limited treatment options where responses would not be expected from retreatment with a checkpoint inhibitor alone.

Now what

One of the reasons Mirati's stock has been on fire is that Bristol-Myers Squibb recently threw more than $3 billion at Nektar Therapeutics (NASDAQ:NKTR) to get its hands on the rights to a drug that could potentially expand the pool of patients who could use Opdivo.Traders might believe that this most recent clinical update won't be enticing enough to get a big pharma company to swoop in and write a big check. 

Will sitravatinib's data prove to be strong enough to entice a buyout offer or eventually win regulatory approval? That question remains up in the air, so my plan is to track Mirati's progress from the safety of the sidelines.

Brian Feroldi has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.