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 Regulus Therapeutics (RGLS 2.03%) broke down today, falling by over 10% after the company released disappointing news for its closely watched hep C treatment RG-101. Specifically, Regulus noted that only 64% of patients receiving a single 4 mg/kg subcutaneous dose of the experimental treatment (9 out of 14 total) were effectively clear of the virus after about 8 weeks or 57 days.
Although these patients will need to be followed until the standard 12-week benchmark is reached, this low effective cure rate so far doesn't appear to bode well for the drug.
So what: What's important to understand is that the currently available treatments from AbbVie and Gilead Sciences tend to show functional cures of between 90% to 99%, depending on the patient population. So 64% simply won't cut it.
Topping it off, Achillion Pharmaceuticals announced stellar results for its experimental hep C drug, ACH-3102, this morning, with the compound helping to produce 100% cure rates after a mere 6-weeks of treatment. In short, Regulus appears to be way behind the proverbial eight ball when it comes to developing a next-generation hep C treatment at this point.
Now what: Although management tried to sound optimistic about today's top-line data release, they did admit to a change in their developmental plans for RG-101 moving forward. Namely, future studies will center on combining RG-101 with other next-gen treatments in order to generate sustained responses, as well as upping the number of injections. Put simply, RG-101 probably won't see the light of day as a monotherapy anytime soon.
Given that Regulus is unlikely to beat out the long-line of competitors gunning to develop hep C therapies with shorter treatment times, RG-101's value proposition looks significantly diminished following this data release. So today's drop does appear to be justified -- and I'm not too confident in the stock's prospects here.
