Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.
What: Shares of Curis (NASDAQ:CRIS), a biopharmaceutical company focused on developing therapies to treat cancer, plunged as much as 27% after announcing its third-quarter results and providing a pipeline update.
So what: For the quarter, Curis delivered a monstrous improvement in revenue to $7.2 million from less than $0.6 million in the previous year as its net loss shrank by nearly half to $1.9 million, or an adjusted $0.02 EPS loss. By comparison, the Street had been forecasting $7.3 million in sales on a loss of just $0.01, so Curis was a tad light on both accounts.
What's really sacking Curis' share price today, though, is the announcement that early-stage cancer drug CUDC-427 had been placed on partial clinical hold by the Food and Drug Administration, which will negate any chance of Curis enrolling any new patients into its phase 1 study. The reason behind the hold is due to the death of a patient from liver failure that occurred one month after this patient stopped taking CUDC-427. In the interim, Curis will need to provide the FDA with additional safety and efficacy information in the hope that it will lift the partial clinical hold.
Now what: If 2013 stands out as anything, it is the year of the clinical hold! I cannot remember a year where I've seen more experimental drugs placed on the backburner by the FDA due to safety concerns. The good news is that this means the FDA isn't sacrificing safety in any way when it comes to the development of news drugs. For Curis, though, it's a disappointing setback. This by no means is a deathblow to CUDC-427 as the two events (taking CUDC-427 and the subsequent liver failure) may be completely unrelated, but it does halt research (for now) into a potentially exciting new anti-cancer therapy for advanced or refractory solid-tumors or lymphomas. For now, I'd suggest giving Curis the old watch-and-wait approach.