What happened

Shares of AnaptysBio (NASDAQ:ANAB), a clinical-stage biotechnology company, are sliding in response to results recently posted by Regeneron (NASDAQ:REGN) for REGN3500. Investors, worried that mediocre results for Regeneron's IL-33 antibody mean trouble for AnaptysBio's lead candidate, pushed the stock 10.9% lower as of 2:46 p.m. EDT on Friday.

So what 

AnaptysBio's lead candidate, etokimab, reduces inflammation by inhibiting IL-33, which is the same target REGN3500 aims for. Regeneron didn't share all the details from a recently completed midstage study with REGN3500 as a treatment for eosinophilic asthma, but the biotech did share something disturbing. Patients dosed with Dupixent, an IL-4 antagonist approved to treat eczema and asthma, showed that the drug outperformed REGN3500 on its own.

Guy in a suit drawing a downward sloping chart.

Image source: Getty Images.

The purpose of the study was to test REGN3500 plus Dupixent against Dupixent monotherapy, but investigators also treated a group of patients with REGN3500 on its own. Patients receiving Regeneron's IL-33 drug on its own underperformed the Dupixent-only group. Also, patients given REGN3500 in combination with Dupixent didn't perform any better than those treated with Dupixent as a monotherapy.

Now what

This outcome is troubling because there's little chance that AnaptysBio will record significant sales of etokimab if it can't clearly outperform Dupixent. But don't assume AnaptysBio's candidate will fizzle until you get a closer look.

So far, all we know is that a handful of patients treated with an IL-33 candidate that Regeneron had on the back burner didn't perform significantly better than those given available care in one of three indications AnaptysBio is pursuing with etokimab. Before assuming that AnaptysBio's IL-33 candidate is doomed, it's important to realize that Regeneron's study split just 38 asthma patients up into five different groups, so an outlier or two could have made its IL-33 drug look much worse than it really was.

We'll know more about etokimab's chances of outperforming Dupixent as a treatment for eczema when the company reports results from a phase 2 study in the second half of the year.