What happened

Shares of Corvus Pharmaceuticals (CRVS 3.54%), a clinical-stage biotech, were down by 11.7% as of 2:43 p.m. EDT on Wednesday. Although the company announced the pre-print of results from its discontinued COVID-19 study evaluating the anti-CD73 antibody mupadolimab this morning, the real driver behind today's sell-off appears to be good old profit taking. 

Over the four prior trading sessions, Corvus shares shot up by more than 230% in response to AstraZeneca's (AZN 1.67%) interim results from a midstage trial in patients with stage 3 non-small cell lung cancer (NSCLC). What sparked Corvus' jaw-dropping rally is the finding that Astra's own anti-CD73 antibody, known as oleclumab, significantly boosted response rates and progression-free survival in advanced NSCLC patients when combined with the blockbuster checkpoint inhibitor Imfinzi. 

Businessman drawing a red line going down.

Image source: Getty Images.

So what

Corvus is currently testing mupadolimab as both a monotherapy and as part of a combination treatment in two early-stage trials for various solid tumors. Investors, for their part, seem to think that this experimental CD73 antibody might attract either a lucrative licensing deal or perhaps a full-on buyout in the wake of Astra's impressive midstage trial results. Now, the interesting part of this story is that this hypothesis could actually have some truth behind it. Big pharma has shown a keen interest in early-stage oncology assets of late, especially ones with a novel mechanism of action such as mupadolimab.  

Now what

Is Corvus stock worth buying on this pullback? While speculative, this small-cap biotech may indeed be worth the risk. Astra, and several other big pharmas, have long been on the hunt for agents to boost the efficacy of their checkpoint inhibitors in several hard-to-treat cancers. So it wouldn't be surprising in the least if one or more of these pharma giants approached Corvus about a partnership soon.

That being said, there are no guarantees that a deal will materialize, meaning that investors may want to keep their starter position on the small side for the time being.