Shares of clinical-stage biopharmaceutical company Immunovant (IMVT 3.20%) plunged by 27.2% on Tuesday following the company's release of its financial results for the third quarter of its fiscal year 2021 that ended on Dec. 31.
There wasn't a lot of new or groundbreaking information in Immunovant's quarterly update. The company does not have any products on the market, and it does not generate any revenue. The drugmaker recorded a net loss of $31.8 million on the bottom line, or a loss of $0.32 on a per-share basis. On average, analysts expected the company to record a net loss per share of $0.26.
Could the bottom-line miss be the reason why Immunovant's stock lost altitude today? That seems unlikely: Investors don't care too much about the revenue and earnings of clinical-stage biopharmaceutical companies. Rather, regulatory updates and information regarding the progress of clinical trials are much more critical.
On that front, Immunovant did report some news today, although some of it was already known. As a reminder, the company recently announced that it had to temporarily halt a couple of clinical trials for IMVT-1401, a potential treatment for thyroid eye disease (TED). The decision came following recorded cases of elevated total cholesterol and LDL (a form of cholesterol that is potentially harmful) levels in patients treated with IMVT-1401.
Today, Immunovant announced that it alerted regulatory authorities of these developments. The company has started a comprehensive review of the data to better characterize the higher LDL levels observed in patients treated with IMVT-1401.
Today's quarterly update certainly could have been better for Immunovant. No doubt investors would have loved to hear that the company's clinical trials for IMVT-1401 were back on track. Perhaps that explains why Immunovant's shares dropped today. The healthcare company plans to continue the development of IMVT-1401, and it will provide another update in the second quarter of the current calendar year.