After reporting its fourth-quarter and full-year financials, Xencor Inc. sustained a steep drop in its share price.
The stock went from a closing price of $26.52 on Feb. 27, the day the Pasadena-based pharmaceutical manufacturer reported earnings after the market closed, to $22.79 the following day, a decrease of 14%.
Investors were perhaps spooked by Xencor’s poor fourth quarter, or it could have been the announcement during a call with analysts of the death of a patient during a clinical trial of the company’s prostate cancer drug.
According to Dr. Nancy Valente, chief development officer of Xencor, the death was linked to the patient having hepatitis.
“That’s the only immune-related hepatitis death we’ve seen across our program with more than 240 patients treated both in the monotherapy and combination settings,” Valente said.
The drug, named vudalimab, is used to treat patients with metastatic castration-resistant prostate cancer and non-small cell lung cancer
The company’s stock rose to as high as $23.92 on March 4 before falling again.
While the stock price dropped recently, it’s still higher than it was for most of the last nine months. It reached a low of $16.53 on Nov. 9. Xencor shares closed at $23.79 on March 7.
Xencor’s fourth-quarter and full year financials were mixed.
On Feb. 27, the company reported a net loss of $19 million (-31 cents a share) for the quarter ending Dec. 31, compared with a net loss of $12 million (-20 cents) in the same period of the previous year. Revenue increased by 107% from the fourth quarter of the prior year to $44.7 million.
Analysts question safety of drug
For the full year, Xencor reported a net loss of $126 million (-$2.08 a share) compared with the previous year’s net loss of $55 million (-93 cents). Revenue increased by 2.3% from the prior year to $168 million
Analysts on average expected earnings of -9 cents for the fourth quarter, according to LSEG, a provider of financial markets data.
During the conference call, Etzer Darout an analyst with BMO Capital Markets, inquired about the safety profile of vudalimab and whether the company was doing anything to incorporate into the study to mitigate autoimmune hepatitis.
“Is this something that is just unique to this patient or are other things sort of going on that you need to understand?” Darout asked.
Valente replied that the patient who had died had responded to the therapy but did have other treatment-adverse factors, including diabetes mellitus and diabetic ketoacidosis.
“We have looked across the entire program and we don’t see anything concerning relating hepatitis. As far as the protocol and the investigators, we have emphasized to the investigators to be watchful for this and communicated with them,” Valente said.
“The protocol does include the (National Comprehensive Cancer Network) guidelines for treatment, and is also consistent with (American Society of Clinical Oncology) guidelines and other society guidelines like the (gastrointestinal) guidelines for monitoring and treatment,” she said.
“And so, we do include screening at baseline for any diseases that might contribute to hepatitis,” Valente added. “And we have frequent laboratory monitoring.”
