What happened

Shares of ChemoCentryx (NASDAQ:CCXI) 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 (NASDAQ: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.