Shares of the clinical-stage biotech Kodiak Sciences (KOD -1.50%) are down by a hefty 80.3% as of 2:22 p.m. ET Wednesday afternoon. The drugmaker's stock is plunging today in response to its lead product candidate, KSI-301, failing to meet the primary endpoint of a combined phase 2/3 trial as a treatment for wet age-related macular degeneration (wet AMD).
Specifically, Kodiak said that KSI-301 didn't exhibit long-term non-inferiority when compared to Regeneron Pharmaceuticals' (REGN 1.26%) blockbuster medication Eylea (aka aflibercept). The developmental biotech was hoping that its rival therapy would offer patients a more convenient option relative to Regeneron's market-leading product.
With this key competitive threat off the table, Regeneron's shares have been one of the few winners in the volatile pharmaceutical space today. The biotech's stock, for instance, rose by as much as 3.66% in early morning trading in response to this news.
Kodiak, on the other hand, has so far shed over $2 billion in market cap as a result of this clinical setback. The steep drop in Kodiak's valuation isn't altogether surprising, however. This unfortunate trial result likely wiped out over $1.2 billion in peak annual sales for the drugmaker. It also probably eliminated Kodiak's quickest pathway toward becoming a cash flow positive business.
Is Kodiak's stock worth picking up on this sharp drop? While the biotech does have other trials underway, biotech investors might want to take a wait-and-see approach with this name for the time being.