Please ensure Javascript is enabled for purposes of website accessibility

Why CytomX Therapeutics Stock Is Crashing Today

By Keith Speights – Dec 21, 2021 at 12:12PM

Key Points

  • CytomX reported disappointing results from a phase 2 study of experimental cancer therapy CX-2029.
  • The company and partner AbbVie are continuing enrollment and plan to report more data in 2022.

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

Investors didn't like the company's preliminary phase 2 results for its experimental cancer therapy.

What happened

Shares of CytomX Therapeutics (CTMX -1.07%) were crashing 40.1% lower as of 11:44 a.m. ET on Tuesday. The steep decline came after the company announced disappointing preliminary results from a phase 2 study evaluating CX-2029 in treating patients with either advanced squamous non-small cell lung cancer (sqNSCLC) or head and neck squamous cell carcinoma (HNSCC). CX-2029 is an antibody-drug conjugate that's being co-developed by CytomX and AbbVie (ABBV 1.23%)

So what

CytomX Therapeutics Chairman and CEO Sean McCarthy said in a press release that the company was "pleased" to report the preliminary results. He added that CytomX is "encouraged" by the response rates seen and the low discontinuation rate in the phase 2 study.

So why did the biotech stock plunge with this seemingly positive reaction?

A scientist holding one hand to face and a beaker in the other hand.

Image source: Getty Images.

McCarthy is doing what many biopharmaceutical executives do when they have disappointing news to share. Like Bing Crosby once sang, he accentuated the positive. However, the lyrics to that old song also mentioned eliminating the negative. CytomX wasn't able to do that.

The company reported an objective response rate (the percent of patients whose tumors decreased) of 18.8% in patients with advanced sqNSCLC who were treated with CX-2029. The objective response rate for patients with HNSCC was only 4%.

However, disease-control rates looked better with both types of cancer -- 87.5% for sqNSCLC and 56% for HNSCC. The safety profile for CX-2029 was also consistent with what was observed in the phase 1 study of the antibody-drug conjugate.

Now what

CytomX and AbbVie are continuing enrollment in the phase 2 study of patients with lung cancer. The partners expect to provide additional updates in 2022.

Keith Speights owns AbbVie. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.