Shares of Tesaro (NASDAQ: TSRO) dropped 13.8% on Wednesday, as the biotech continues to struggle from the data onslaught at the European Society for Medical Oncology (ESMO) Congress. All told, Tesaro is down 25.7% from Friday's close before the meeting started.
Tesaro presented data at ESMO for its anti-PD-1 antibody, TSR-042, and while positive, it was early stage phase 1 data in a competitive space, so it wasn't likely to move the needle positively.
On the downside, Tesaro's ovarian cancer drug, Zejula, got bad news from competitors AstraZeneca (NYSE:AZN) and Merck (NYSE:MRK), which reported promising data for Lynparza, is a poly ADP ribose polymerase (PARP) inhibitor just like Zejula. Clovis Oncology (NASDAQ:CLVS), which has a PARP inhibitor of its own called Rubraca, also saw shares fall dramatically on the news.
A solid 60% of patients treated with AstraZeneca and Merck's Lynparza hadn't progressed and were still alive after three years, compared with just 27% for the group that got a placebo. The trial tested Lynparza as a first-line maintenance therapy, while Zejula and Lynparza are currently approved for women with recurrent ovarian cancer. The use of Lynparza in first-line therapy should result in fewer patients available with recurrent cancer, and it sets a high bar for what Zejula will have to put up from its phase 3 first-line ovarian cancer study, dubbed Prima, which is scheduled to report out in late 2019.
There doesn't seem to be any additional reason Tesaro would continue to fall today, but that doesn't mean we've hit the bottom, either. After a data release, it can sometimes take investors a while to decide the new appropriate valuation for a company.
Investors looking for some solace might get it from the third-quarter earnings report, scheduled to be released next week, in which management is looking for Zejula sales of $58 million to $62 million. Management blew through its first-half guidance -- upping fiscal revenue guidance for the drug by $30 million at the bottom of the range after the second quarter -- so it'll be interesting to see where the third-quarter sales came in and how management thinks the ESMO data might affect off-label use of Lynparza before AstraZeneca and Merck are able to gain approval as a first-line treatment.