Why Acelyrin Stock Plummeted 59% This Week

Key Points

Acelyrin's izokibep failed to meet statistical significance in its primary endpoint in a clinical trial evaluating the drug for the treatment of a skin inflammatory disorder.

Shares of the biopharma company fell more than 50%, wiping out all of its post-IPO gains.

Though the overall study fell short, management has pledged to continue evaluations of izokibep in HS, as well as other indications.

Motley Fool Issues Rare “All In” Buy Alert

The recently public biopharma company announced disappointing results from a clinical trial of its lead drug candidate.

What happened

Shares of Acelyrin (SLRN) fell 58.5% this week, according to data provided by S&P Global Market Intelligence, after the recently public biopharmaceuticals company announced discouraging results in a clinical trial evaluating the efficacy of its experimental lead drug, izokibep, in treating an inflammatory skin disease.

So what

Hidradenitis suppurativa (HS) is a chronic inflammatory skin disease that causes scarring, abscesses, malodor, and severe pain. HiSCR (Hidradenitis Suppurativa Clinical Response) measures response to treatment in HS, with HiSCR75 and HiSCR100 indicating at least 75% and 100% reductions, respectively, in total abscess and inflammatory nodule count (and with no worsening of symptoms relative to a baseline measurement).

Late Monday, Acelyrin issued a press release stating the primary endpoint of its HiSCR75 at week 16 of a phase 2b/3 trial did not meet statistical significance -- essentially meaning the treatment failed to demonstrate superiority to placebo in reducing symptoms of moderate-to-severe HS. Shares of the biotech stock plummeted more than 50% on Tuesday in response, and closed the trading week at $11.38 per share. The move effectively wiped out all of the company's gains since going public in an upsized IPO at $18 per share in May.

Now what

Acelyrin added that response rates for izokibep did show early HiSCR100 responses and good safety and tolerability properties.

"The consistent and early achievement of HiSCR100, along with our prior izokibep experience in Psoriatic Arthritis, continues to demonstrate the potential of izokibep for resolution of disease, especially in difficult to treat tissues," stated Acelyrin CEO, Shao-Lee Lin, M.D., Ph.D. The company interprets these results as supporting further investigation of the weekly dosing of the drug in HS and other indications, including uveitis and psoriatic arthritis.

Acelyrin believes its key drug candidate still holds a promise. But investors are right be disappointed with the study results, and the high-flying biotech stock understandably plunged as a result.

Key Points

NASDAQ: SLRN

Acelyrin

What happened

So what

Now what

Premium Investing Services