Histogenics Corp (NASDAQ: HSGX) is having an overwhelmingly rough start to the trading session this morning, and for good reason. The comapny announced clinical data that didn’t quite meet up with expectations. Of course, the failed trial proved to be a cause for concern for investors who are sending the stock spiralind down in the market today. Below, we’ll talk about:
- The clinical data;
- what we’re seeing from HSGX stock as a result; and
- what we’ll be watching for ahead.
HSGX Tanks On Clinical Data
As mentioned above, Histogenix Corporation is having an incredibly rough start to the trading session this morning after the company announced data from a Phase 3 clinical trial. In a press release issued early this morning, the company announced that the Phase 3 clinical trial assessing NeoCart missed its primary endpoint
The goal for HSGX was to show a statistically significant improvement in pain and function in a dual threshold responder analysis one year after treatment as compared to a microfracture. In the mITT (modified Intent to Treat) population, 74.2% of the NeoCart patients showed clinically meaningful improvements in pain and function at six months. Unfortunatley however, these improvements didn’t last quite as long as the company wanted them to, causing it to miss its primary endpoint.
In a statement, Adam Gridley, President and CEO at HSGX, had the following to offer:
Based on the totality of the data generated in the Phase 3 clinical trial, we continue to believe in NeoCart’s potential as a treatment for knee cartilage damage. When we designed our Phase 3 clinical trial in 2009, we set a very high clinical bar for NeoCart and narrowly missed hitting the trial’s primary endpoint with statistical significance by only two microfracture responders out of the 249 patients that participated in the trial. While the NeoCart treatment group exhibited a response as early as three months after treatment that continued through two years, the microfracture response rate was better than expected, which impacted the statistics. We are encouraged by the results and believe we have a meaningfully differentiated product that, if approved, can compete effectively and provide physicians and patients with a beneficial treatment option that may grow the market… We continue to analyze the data and are in the process of scheduling a meeting with the FDA to discuss the results and prepare for a potential submission of a biologics license application for NeoCart. We wish to acknowledge and thank the patients and investigators who participated in the trial and shared their positive experiences with NeoCart.
What We’re Seeing From The Stock
One of the first lessons that we learn when we start to dig into the market is that the news leads to moves. In the case of Histogenics, the news proved to be overwhelmingly negative. After all, there are few factors that can lead to declines quite like a failed clinical trial. So, as we would expect, upset investors are sending the stock on a spiral toward the bottom. Of course, our partners at Trade Ideas were the first to alert us to the declines. At the moment (8:57), HSGX is trading at $0.71 per share after a loss of $2.06 per share or 74.37% thus far today.
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What We’ll Be Watching For Ahead
Moving forward, the CNA Finance team will continue to keep a close eye on HSGX. In particular, we’re interested in following the story surrounding NeoCart to see what the company does with the asset next. While the data was positive, the treatment worked in the 6-month time frame and proved to be safe and well-tolerated. So, while it will likely take some fund raising, the company may consider creating a new trial with protocol that matches the treatments ability a bit better in the future. Nonetheless, like I just said, it will take some funding. So, the company is between a rock and a hard place at the moment. We’ll continue to keep a close eye on the news and bring it to you as it breaks!
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