What happened

Shares of Precision BioSciences (NASDAQ:DTIL) fell as much as 51.4% today after the company announced updated data from its lead drug candidate at the annual meeting of the American Society of Hematology (ASH). 

The preliminary results for PBCAR0191 in relapsed/refractory non-Hodgkin's lymphoma (NHL) and B-cell precursor acute lymphoblastic leukemia (B-ALL) were relatively impressive. In fact, shares initially rose as much as 20.4% on Monday before tumbling down to a loss of about 50%. Investors appear to be concerned with the durability of patient responses. 

Shares had tripled in the five-week period dating back to the beginning of November. The stock is giving up a lot of those gains, which makes today's loss appear worse than it might have been otherwise. As of 2:41 p.m. EST on Monday, the pharma stock had settled to a 50.1% loss. Even with today's tumble, shares have increased 50% since the beginning of November.

A pink arrow crashing through the x-axis of a chart.

Image source: Getty Images.

So what

PBCAR0191 is a cellular medicine based on chimeric antigen receptor (CAR) T cells. Precision BioSciences used its proprietary ARCUS gene editing system to engineer the T cells to home in on CD19 antigens expressed by cancerous white blood cells. 

The updated phase 1 results presented at ASH include nine patients (six with NHL and three with B-ALL) treated within two dose cohorts. PBCAR0191 achieved an objective response rate (ORR) of 78% overall, which means seven of nine individuals responded to treatment. Two patients achieved a complete response, meaning they had no evidence of disease at the 28-day mark.

But some of the responses in NHL patients weren't durable. One patient who relapsed after being treated with Yescarta, the first CAR-T approved by American regulators, maintained a partial response for six months after receiving the low dose of PBCAR0191. It was the longest response achieved to date, but the individual eventually relapsed. Two other NHL patients, one from each dose cohort, achieved partial responses at 14 days but had evidence of disease progression at 28 days.

To be fair, all individuals in the study had advanced stages of disease. The only two patients who didn't respond at all (both with B-ALL) had poor prognoses when they were enrolled in the study.

Precision BioSciences is enrolling individuals into a third dose cohort, which will be the highest studied to date. Preliminary results from the cohort will be available in early 2020. While a higher dose may provoke more-durable responses, it could also increase the side effects of the drug. Three of the nine patients in the study developed cytokine release syndrome (two had grade 1, one had grade 2) and one patient developed neurotoxicity (grade 2). None of the adverse events were serious, and all were resolved, but similar safety concerns have derailed other once-promising immunotherapies.

Now what

Investors simply have to remain patient with Precision BioSciences. If the next data update from the higher dose demonstrates a continuation in dose-dependent biomarkers and maintains an acceptable safety profile, then the gene editing stock could bounce back. Today's plunge does seem a little harsh relative to the company's potential, which spans immuno-oncology, rare diseases, and agricultural biotech.