Markets reacted with some uncertainty to Wednesday's decision from the Federal Reserve to leave interest rates unchanged. Despite the pause, the Fed signaled further potential rate hikes, and that left some investors worrying whether the central bank could exacerbate a slowing economy. The Nasdaq Composite (^IXIC 2.02%) appeared poised to lose more than half a percent based on stock index futures Thursday morning.
One Nasdaq stock that contributed to the morning's decline was Coinbase Global (COIN 5.68%), which has seen considerable pressure lately. Yet the biggest drop in the market came from a biotech stock, Mersana Therapeutics (MRSN 3.16%), which announced extremely disappointing news about a key candidate treatment.
Coinbase deals with crypto woes
Shares of Coinbase Global were down 5% early Thursday morning. The cryptocurrency exchange provider made a smart move with its capital structure, but it still faces plenty of challenges on multiple fronts.
Perhaps the most obvious short-term factor hitting Coinbase was a decline in the crypto markets. Bitcoin (CRYPTO: BTC) fell by more than $1,000, dropping below $25,000, and Ethereum (CRYPTO: ETH) lost roughly $100 to around $1,640. When digital asset values fall, it makes the traders who use Coinbase's platform less enthusiastic about crypto in general, and that can eat into the trading fees that Coinbase collects.
Longer-term, Coinbase faces a regulatory threat, as the U.S. Securities and Exchange Commission has sued it and fellow crypto exchange Binance for alleged violations of securities laws. That controversy could take months or even years to resolve, and an adverse decision could be catastrophic for the entire industry.
Nevertheless, Coinbase is doing what it can to ensure its financial survival. A privately negotiated deal involved purchasing $64.5 million in outstanding convertible debt at a 29% discount to par value, and that could potentially help shareholders reap a bigger benefit if the stock rebounds. Coinbase stock has been volatile, though, and that's likely to continue until there's more clarity on the regulatory and economic fronts.
Mersana sees a setback
Elsewhere, shares of Mersana Therapeutics plunged, losing 58%. The Massachusetts-based biotech got bad news from the U.S. Food and Drug Administration (FDA), and investors don't have much confidence about whether the problem will get resolved quickly.
Mersana said that the FDA issued a partial clinical hold in enrolling new patients in the biotech's ongoing Up-Next and Upgrade-A clinical trials of its UpRi antibody-drug conjugate candidate treatment for ovarian cancer. The hold followed Mersana's submission of a safety report that suggested that serious bleeding events appear to occur in study participants at a higher rate than in the background population. Five bleeding events were fatal among the 560 patients in the trial.
Under the terms of the partial clinical hold, patients currently enrolled in the trials can continue to receive UpRi. Mersana expects to start disclosing top-line clinical trial data from its earlier Uplift study, which already completed enrollment late last year.
Mersana's stock has seen a lot of ups and downs in recent years, as hopes for its ovarian cancer research haven't yet led to an FDA approval. With the potential for longer delays as a result of the partial clinical hold as well as concerns about whether the medical community will be comfortable embracing UpRi even if regulators do eventually approve it, Mersana shareholders are understandably less optimistic about the stock's prospects in the coming months.
