What happened

Shares of Wave Life Sciences (WVE -2.16%) are down 29% at 1:29 p.m. EDT after the company announced that WVE-120102 and WVE-120101, two of its drugs to treat Huntington's disease, failed to show an effect in early stage clinical trials.

So what

Huntington's disease is caused by different mutations in the huntingtin protein. WVE-120101 and WVE-120102 are designed to reduce the expression of mutant huntingtin protein (mHTT) for patients with the SNP1 and SNP2 mutations, respectively.

The drugs appear to be working, but unfortunately the reduction on mHTT wasn't clinically meaningful. Results from the clinical trial testing WVE-120102 showed the highest dose of the drug reduced mHTT by 9.9% in the cerebrospinal fluid compared to a 0.8% decrease for placebo. In a separate clinical trial of WVE-120101, which wasn't as far along, the highest dose reduced mHTT by 11.6% compared to 10% for placebo.

Considering WVE-120101 and WVE-120102 use the same technology, Wave Life Sciences decided to stop clinical development of both drugs.

Doctor sitting at a desk talking to a patient

Image source: Getty Images.

Now what

Fortunately Wave Life Sciences still has one more shot on goal for Huntington's disease. WVE-003 treats patients with the SNP3 mutation, which affects 40% of patients with Huntington's disease. Importantly, the drug uses an improved backbone chemistry, which Wave Life Sciences believes will last longer in the body. The company plans to begin treating patients with WVE-003 later this year.

Beyond Huntington's disease, Wave Life Sciences also has two other drugs ready to enter the clinic this year: WVE-004 for amyotrophic lateral sclerosis and frontotemporal dementia and WVE-N531 for Duchenne muscular dystrophy.

While losing its two lead programs is devastating, Wave has enough cash to get it through the second quarter of 2023. That should be enough time to generate additional data to prove that its improved backbone chemistry works, which would allow the company to raise additional capital at a higher valuation.