What happened

Shares of AnaptysBio (NASDAQ:ANAB), a clinical-stage biopharmaceutical company, tumbled 10.3% today. Investors weren't impressed by top-line data for ANB019, the company's second most advanced new drug candidate.

So what

AnaptysBio announced top-line data from an interim analysis of the ongoing phase 2 study with ANB019 known as Gallop. The Gallop trial is supposed to enroll up to 10 patients with a rare autoimmune disorder called generalized pustular psoriasis (GPP). But one of the first three patients treated dropped out early, following a serious adverse event that could have been caused by ANB019.

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The candidate, ANB019, is a potential first-in-class inhibitor of the interleukin-36 (IL-36) receptor, which appears to be overactive in patients with GPP. Patients that remained on therapy for 113 days showed meaningful reductions in disease activity, suggesting the company is onto something.

If only two patients had been dosed so far, the results would have been viewed as a success. But a third patient was diagnosed with a serious blood infection three days after receiving a first dose of ANB019, causing the biotech stock to be squeezed today.

Now what

Blood-based infections caused by open sores are fairly common among GPP patients, but this case could be the fault of ANB019. However, there are only around 3,000 people in the U.S. being treated for GPP, and enrolling enough patients into a study to prove ANB019 is not to blame for blood infections might not be possible.

In March, the German pharmaceutical company Boehringer Ingelheim reported successful results from a trial with BI 655130, showing that it cleared up GPP symptoms without any serious adverse events. Boehringer's candidate is an IL-36 inhibitor like ANB019, so AnaptysBio could have a hard time marketing ANB019 with a blemished safety profile even if it performs well enough to earn an approval from the Food and Drug Administration.