What happened

Shares of Syndax Pharmaceuticals (NASDAQ:SNDX) were sinking 28% as of 11:32 a.m. EDT on Tuesday. This big decline came after the company reported positive results from a phase 1 study evaluating SNDX-5613 in treating leukemia.

So what

Normally, when a biotech stock plunges after announcing clinical results, it's because the news was really bad. However, that didn't seem to be the case for Syndax -- at least on the surface.

The company reported a 48% overall response rate in patients with mixed lineage leukemia-rearranged (MLLr) and nucleophosmin (NPM1c) mutant relapsed/refractory (R/R) acute leukemias. Among the responders, 67% achieved minimal residual disease-negative status (full remission).

Red line with arrow plunging through a floor with a man wearing a suit looking at it.

Image source: Getty Images.

Syndax said that the experimental therapy was generally well tolerated. There weren't any treatment-related discontinuations in the study. The company said that the only grade 3 or greater (more serious) adverse events occurring in at least 5% of patients in the study were QT prolongation (where the heart muscle takes longer than normal to recharge between beats), anemia, and differentiation syndrome (a complication from leukemia treatments).

So why did Syndax's shares fall? It's probably because some investors were still concerned about the safety profile of SNDX-5613. The company said that two of the 22 patients (9%) at the recommended phase 2 dose experienced grade 3 (severe) QT prolongation. Investors also were hoping for even better response rates. 

Now what

Syndax Pharmaceuticals CEO Briggs Morrison said that the company has identified the recommended phase 2 dose. The drugmaker now plans to move forward with the pivotal phase 2 portion of the clinical study by the end of the second quarter.

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