Please ensure Javascript is enabled for purposes of website accessibility

Why Selecta Biosciences Tumbled 34% Today

By Todd Campbell – Oct 1, 2020 at 3:38PM

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

Disappointing phase 2 data casts doubt on SEL-212's future.

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 -5.29%) 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 0.98%), or Sobi, earlier this year.

An arrow  broken in half with the first half ascending and second half descending over a cityscape.

IMAGE SOURCE: GETTY IMAGES.

Unfortunately, a phase 2 study evaluating SEL-212 head-to-head against Horizon Therapeutics' (HZNP -1.80%) 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.

 

Todd Campbell has no position in any of the stocks mentioned. His clients may have positions in the companies 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

Selecta Biosciences, Inc. Stock Quote
Selecta Biosciences, Inc.
SELB
$1.61 (-5.29%) $0.09
Horizon Therapeutics Public Limited Company Stock Quote
Horizon Therapeutics Public Limited Company
HZNP
$62.69 (-1.80%) $-1.15
Swedish Orphan Biovitrum AB (publ) Stock Quote
Swedish Orphan Biovitrum AB (publ)
BIOVF
$18.58 (0.98%) $0.18

*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
342%
 
S&P 500 Returns
107%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 09/30/2022.

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.