Please ensure Javascript is enabled for purposes of website accessibility

Why Satsuma Pharmaceuticals Stock Is Plummeting Today

By Keith Speights - Sep 10, 2020 at 11:39AM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Investors are reeling from a late-stage flop for the company's only pipeline candidate.

What happened

Shares of Satsuma Pharmaceuticals (STSA 3.54%) are plunging today, down 74.8% as of 11:17 a.m. EDT, after the company announced that investigational drug STS101 failed to meet the primary endpoints in a phase 3 study in treating migraine.

So what

Neither the 3.9 mg nor the 5.2 mg dose of the nasal powder achieved statistically significant improvement in the key symptoms of migraine at two hours after administration. Satsuma CEO John Kollins said that the company was "surprised and disappointed" by these results. 

Man wearing a suit looking at red line with arrow plunging through the floor

Image source: Getty Images.

Disappointment really doesn't begin to describe what the drugmaker's investors are feeling. Satsuma doesn't have any other pipeline candidates. 

The only sliver of good news in the late-stage results for STS101 was that it did show significant effects on improving pain and other of the most bothersome migraine symptoms by three hours after administration. The drug also was well tolerated in the study, with few adverse events and no serious adverse events reported. 

Now what

What's the plan B for Satsuma? It's too soon to know. The company stated that it's conducting further analysis of the late-stage results for STS101 and "expects to provide a more detailed update on its business plans after these analyses are completed." 

Satsuma's major clinical setback underscores the risks of investing in biotech stocks. There are simply no guarantees that even promising pipeline candidates will be successful.

Keith Speights has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Satsuma Pharmaceuticals, Inc. Stock Quote
Satsuma Pharmaceuticals, Inc.
STSA
$6.00 (3.54%) $0.20

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
400%
 
S&P 500 Returns
128%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 08/14/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.