The Nasdaq Composite (^IXIC 2.02%) has performed extraordinarily well in 2023, getting off to its best first half of a year since the 1980s. Even though it has already recovered a lot of its lost ground from 2022's bear market, the Nasdaq has held up well even as the broader market has paused in the past couple of weeks. Stock index futures suggested the Nasdaq would post a modest rise Tuesday morning as well.
However, a couple of Nasdaq-listed stocks in the biotech space weren't as lucky. Both Viridian Therapeutics (VRDN 1.42%) and Iovance Biotherapeutics (IOVA 0.87%) posted double-digit-percentage declines in premarket trading on Tuesday morning, as each one had news to announce that made shareholders question the value of their shares. Here's the latest on Viridian and Iovance and what you should know in evaluating these two Nasdaq biotech stocks.
Viridian's clinical trial data leaves something to be desired
Shares of Viridian Pharmaceuticals were down 18% in premarket trading early Tuesday. The company released data from an early-stage clinical trial, and although there were some encouraging signs in the results, investors seemed unconvinced that the study was as positive as Viridian tried to represent.
From its release, Viridian's phase 1/2 trial of its investigational full antagonist antibody VRDN-001 seemed to offer some promising conclusions in patients with chronic thyroid eye disease. The treatment generally met safety profiles with no reported serious adverse events, and two different doses showed notable improvement in several key metrics relevant to the disease.
In response to the results and following discussions with the U.S. Food and Drug Administration, Viridian will move forward with its proposal to limit its phase 3 Thrive trial evaluating VRDN-001 in thyroid eye disease patients to a single five-dose treatment regimen. Previous plans had included the possibility of a longer eight-dose regimen, but patients expressed a preference for the shorter treatment schedule. Viridian expects results from that trial in mid-2024, and it's also starting a Thrive-2 phase 3 trial in the current quarter in the hopes of having top-line results by the end of next year.
Analysts at Wedbush reduced their price target on Viridian slightly, making a $3 cut to $45 per share. Nevertheless, Wedbush still believes the stock deserved its outperform rating. It's apparent that many investors would have preferred a more aggressive response from Viridian, particularly with the stock already having lost a third of its value since the beginning of 2023.
Iovance cashes in on its success
Shares of Iovance Biotherapeutics had a slightly less extreme move lower, falling 12% in premarket trading. However, the decline only partially offset larger gains the day before, as the biotech company sought to raise capital after announcing encouraging news.
On Monday, Iovance shares jumped more than 20% after the company said that the FDA had offered positive regulatory feedback on its proposed trial for its LN-145 tumor infiltrating lymphocyte therapy for non-small cell lung cancer patients. The FDA expressed its view that the IOV-LUN-202 trial might be suitable for accelerated approval, and Iovance's preliminary analysis of the trial showed some favorable results, albeit needing more time to achieve some of its desired outcomes. Iovance also said that the FDA priority review of its lifileucel treatment for advanced melanoma patients remains on track for an approval decision in late November.
However, the stock dropped as Iovance announced later on Monday that it would do a secondary stock offering to raise cash. The pricing of the offering indicated that the company would sell 20 million shares at $7.50 per share, which was above the stock's closing price last Friday but well below the $8.79 per share closing price after Monday's good news.
It's common for biotech companies to raise capital after announcing good news on clinical trials. However, long-term shareholders are still reeling from the stock's 80% drop since early 2021, and they'd really like to get a big win from Iovance without having to suffer dilution from more stock issuance.