What happened

Shares of ImmunoGen (NASDAQ:IMGN) fell over 42% last month, according to data provided by S&P Global Market Intelligence. Even in a turbulent market, the biopharma stock was more volatile than most. As October went by, investors slowly realized there was more uncertainty heading into a key binary event than the stock's nearly 50% year-to-date gain at the end of September indicated. That helped shares rack up some pretty awful trading days without any news.

Turns out investors were right. When ImmunoGen finally did report highly anticipated data for its combination therapy candidate for treating ovarian cancer, the results didn't reinforce observations from earlier studies. Shares of the biopharma slid another 15% on that news despite a month of investors hedging their bets to account for a possible disappointment.

A scientist in the lab with a disappointed look on his face.

Image source: Getty Images.

So what

ImmunoGen was hoping that a combination of its drug mirvetuximab with Merck's immunotherapy Keytruda would prove effective as a combination therapy in ovarian cancer. An earlier study observed an overall response rate (ORR) of 43%, but the larger study delivered an ORR of 30%. The difference in a subset of patients with a specific genetic mutation that is targeted by mirvetuximab was even larger, going from a very promising 63% in the smaller study to 31% in the expanded trial.

It's not unusual for ORR to recede a little when clinical trials are expanded to include more patients, but the difference observed between trials for the combination therapy is pretty significant. There may be some silver linings for the company to dig into further, such as the fact that an ORR of 30% for ovarian cancer patients that are on their fourth treatment option is relatively impressive.

As far as investors are concerned, the future of mirvetuximab will be determined by an ongoing phase 3 trial investigating its potential to treat ovarian cancer -- without Keytruda. Results for the monotherapy trial are due sometime in 2019.

Now what

The disappointing results from the clinic for ImmunoGen's combination therapy in ovarian cancer obviously were not what investors had hoped for. It continues a tough clinical history for the company, which has been characterized by mid- and late-stage trial failures or near-misses. While ImmunoGen has a relatively healthy pipeline of other drug candidates, investors can't overlook the fact that the business has lost $161 million from operations in the first nine months of 2018. If ongoing studies don't deliver success, then the stock price could deteriorate even further.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.