What happened

Shares of Adverum Biotechnologies (NASDAQ:ADVM) are down 25.8% at 11:12 a.m. EDT after the biotech presented data from the phase 1 OPTIC clinical trial of ADVM-022, a gene therapy for wet age-related macular degeneration, at the Retina Society 2019 Annual Meeting.

The company characterized the clinical study as "positive." Investors clearly saw through the hype.

Doctor looking into a patient's eye

Image source: Getty Images.

So what

Here's the good news that Adverum would like investors to focus on: None of the six patients in this initial cohort took additional anti-VEGF drugs -- Regeneron Pharmaceuticals' (NASDAQ:REGN) Eylea or Roche's Lucentis, for example -- during the 24 weeks after the treatment with ADVM-022. They had all been taking them regularly before the treatment.

But whether to treat with another drug is a subjective question. It's determined by whether the doctor or patient thinks added treatment was needed.

A better way to measure efficacy is by recording how well patients can see using an eye chart to determine the best corrected visual acuity (BCVA). After 24 weeks, patients, on average, were able to recognize two fewer letters than before the treatment with ADVM-022. The spread, defined as the 90% confidence interval, was from -9.1 letters to +5.1 letters. So some patients got a little better, but some patients got substantially worse, and their doctors still chose not to use an additional treatment.

Adverum also pointed out that the anatomy of the retina improved in patients, but that obviously didn't translate into improved sight, so the significance of the finding is unclear. The FDA will ultimately want to see improvement in BCVA or slowing of decline if Adverum runs a placebo-controlled study and the patients' sight gets worse.

Now what

Adverum will continue to follow the patients through 52 weeks. If that data, which should be available in the first half of next year, shows patients haven't declined substantially and still aren't receiving anti-VEGF drugs, it will certainly give more validity to the argument that ADVM-022 is working. Until then, investors are right to be leery, especially with so many other options for biotechs to invest in.