Please ensure Javascript is enabled for purposes of website accessibility

Why ChemoCentryx Shares Crashed 19.1% Today

By Todd Campbell - Updated Jun 5, 2019 at 4:37PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Shock waves from a competitor's stumble sent the clinical-stage biotech's shares reeling.

What happened

Shares of ChemoCentryx (CCXI 3.36%) tumbled 19.1% on Wednesday, after a competitor reported disappointing clinical trial results for a drug similar to the most advanced medicine in ChemoCentryx's pipeline.

So what

InflaRx (IFRX) unveiled mid-stage top-line results today for a phase 2b trial of IFX-1 in patients with hidradenitis suppurativa (HS), a chronic inflammatory skin disorder.

A man staring at a computer monitor showing declining stock price charts.

Image source: Getty Images.

IFX-1 elicited response rates ranging from 40% to 51.5% across various dose cohorts, which failed to separate significantly from the 47.1% response rate in the placebo arm of the study. The news caused InflaRx shares to crash over 90%, but the news also took a toll on ChemoCentryx because its lead drug candidate, avacopan, and IFX-1 both inhibit complement factor C5a antibodies.

Avacopan is currently being evaluated in antineutrophil cytoplasmic antibody (ANCA)-associated vasculitis (AAV), a group of small-vessel inflammatory diseases that can damage organs, including the kidney, with results anticipated from its trial later this year. Additionally, a phase 2b study in HS is enrolling patients, with data expected in 2020.

Now what

These companies are betting that inhibiting C5a, a downstream receptor involved in triggering inflammation that's found in the complement cascade, can work better than C5 inhibitors, such as the blockbuster drug Soliris. 

Following InflaRx results, however, it's less clear if that approach will succeed. In mid-stage trials, adding avacopan to cyclophosphamide, a chemotherapy, bested high-dose prednisone, a steroid, plus cyclophosphamide. However, there's no guarantee that performance will be confirmed when the upcoming phase 3 results for ChemoCentryx in ANCA-AAV are unveiled. 

Since uncertainty has increased, it might be best to focus on other less risky stocks than ChemoCentryx.


Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

ChemoCentryx, Inc. Stock Quote
ChemoCentryx, Inc.
$22.79 (3.36%) $0.74
InflaRx N.V. Stock Quote
InflaRx N.V.

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning service.

Stock Advisor Returns
S&P 500 Returns

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 05/21/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.