What happened

Shares of Mirati Therapeutics (MRTX) slumped more than 28% on Wednesday. The clinical-stage biotech specializes in antibody therapies to treat cancer. 

So what

The stock has been falling all week. On Monday, the company released early phase 2 data on Adagrasib to treat non-small cell lung cancer (NSCLC), along with Keytruda, which is sold by Merck (MRK -0.20%). There are several factors at work here. On Wednesday, Mirati presented the data from its Krystal 7 and Krystal 1 trials with Adagrasib, at the 2022 ESMO Immuno-Oncology Annual Congress. The data was unimpressive for analysts and investors, who might be thinking the drug's objective response rate to NSCLC as a first-line combination therapy to treat advanced cases of the disease isn't enough to distinguish Adagrasib from the current standard of care of Keytruda and chemotherapy.

The other concern is that the drug has a Prescription Drug User Fee Action date of Dec. 14 with the Food and Drug Administration. It is possible word has leaked out that Adagrasib's approval will be denied or delayed.

Now what

The huge drop over two days is concerning, but may be a bit much as Adagrasib is not Mirati's only candidate. The company has Sitravatinib, a multi-kinase inhibitor, in Phase 3 trials as a combination therapy to treat NSCLC. And it has MRTX1133, which, like Adagrasib, is a KRAS inhibitor. It is in early trials as a monotherapy to treat NSCLC, colon cancer, and pancreatic cancer. Long-term investors would be smart to wait out the drop instead of panicking.