What happened

After the company reported its gout drug, SEL-212, failed to meet its primary endpoint in a mid-stage clinical trial, shares in Selecta Biosciences (SELB 1.95%) traded 33.5% lower on Thursday.

So what

The biotech stock licensed SEL-212 -- a combination of Selecta's synthetic vaccine particles encapsulating rapamycin and pegadricase -- to Swedish Orphan Biovitrum (BIOVF -8.52%), or Sobi, earlier this year.

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IMAGE SOURCE: GETTY IMAGES.

Unfortunately, a phase 2 study evaluating SEL-212 head-to-head against Horizon Therapeutics' (HZNP) Krystexxa in chronic refractory gout patients missed its mark. A numerically higher response rate was observed over the six-month period. However, the difference didn't meet the threshold of statistical superiority.

Now what

Although the trial didn't pan out, management remains optimistic, claiming numerical superiority supports phase 3 trials because the comparison in those studies is a placebo rather than Krystexxa. If the trials succeed, then SEL-212's monthly dosing could make it an interesting alternative to Krystexxa, which is dosed twice monthly.

Nevertheless, investors might want to be cautious. There's no guarantee phase 3 trials will pan out, and data from those trials isn't expected until 2022. Additionally, even if the studies succeed, there's no guarantee SEL-212 can win market share away from Krystexxa, given its lackluster phase 2 results.