What happened

Shares of AnaptysBio (NASDAQ:ANAB), a pre-commercial-stage biotech focused on inflammation, splattered all over the pavement after the company told investors its lead candidate, etokimab, failed to provide a significant benefit during an important study. An angry stock market has pummeled the stock 71% lower as of 12:16 p.m. EST on Friday.

So what 

Etokimab was supposed to reduce inflammation by inhibiting IL-33, an unproven target for any autoimmune disorder. Top-line data from the 300-patient phase 2b Atlas study showed that there wasn't any measurable improvement among eczema patients treated with etokimab for 16 weeks versus a placebo group. 

Businesspeople looking at a fallen colleague.

Image source: Getty Images.

The only other drug AnaptysBio has in clinical-stage development is an IL-36 inhibitor called ANB019. In September, a phase 2 trial with ANB019 and patients with generalized pustular psoriasis (GPP) was allowed to continue following an interim analysis. At the interim, only 2 patients out of an expected 10 had been treated and evaluated after 16 weeks. 

The first two GPP patients treated with ANB019 showed complete clearance of skin pustules from day 8 through day 113, which sounds pretty good. What doesn't sound good is the company's inability to complete enrollment of a 10-patient study eight months after it began, despite running the study at seven different locations throughout the U.S. and the U.K.

In the U.S., an estimated 3,000 patients are treated for GPP by dermatologists each year. That's not a large pool to pull from, but this is a severe disease that lacks effective treatment options. Perhaps the company hasn't done the best job getting the word out, but it sure looks as if GPP patients and their physicians are not impressed with anything they've seen from ANB019 so far.

Now what

In response to etokimab's eczema flop, AnaptysBio has decided to postpone a planned phase 2b study with severe asthma patients that hadn't begun enrolling yet. The company began a phase 2 trial with etokimab and patients with nasal polyps last December and will present top-line results from this study in the first quarter of 2020.

In partnership with GlaxoSmithKline, AnaptysBio is also developing an anti-PD-1 drug that could become the 15th drug from its class to earn approval to treat various forms of cancer. With similar treatments like Keytruda dominating the field, though, GlaxoSmithKline does not appear interested in continuing its development.

The company finished September with $421 million in cash and investments and thinks this will be enough to keep the lights on into 2021. Without any exciting new drug candidates in clinical trials, though, what comes after the beginning of 2021 probably won't be pretty.