NewLink Genetics Corp (NASDAQ: NLNK) is tanking in the market this morning with declines of more than 30%. When looking at the chart, and looking for news surrounding the company, the declines may seem shocking. After all, NLNK didn’t release any news of their own. However, there is a very good reason for the declines. Today, we’ll talk about:
- Why NLNK is falling so dramatically;
- what we’re seeing from the stock;
- and what we’ll be watching for ahead.
Why NLNK Is Taking A Dive
As mentioned above, NewLink Genetics is having an overwhelmingly rough start to the trading session this morning, but no news was released by the company. However, this decline isn’t the result of stock-specific news. Instead, it’s the result of a failed clinical trial surrounding a heavily correlated treatment to the company’s targets.
Early this morning, INCY and MRK released data from a Phase 3 combination trial that included a type of cancer drug that is known as an IDO inhibitor. During the trial, epacadostat, an IDO inhibitor was combined with KEYTRUDA. Unfortunately however, there was no statistical significance when it came to progression-free survival, or overall survival. Ultimately, this means that the trial failed.
At first glance, you may be wondering what all of this has to do with NLNK, but there is a strong correlation here. In fact, the company has focused its research and development efforts on IDO inhibitors as targets for cancer drugs. In fact, both indoximod and NLG802, the company’s lead candidates, target the IDO pathway.
The fear here is that NLNK is essentially chasing the end of a rainbow. With the failed trial including well known names in the biotechnology space surrounding IDO failing, there’s now a good chance that trials surrounding the company’s flagship candidates will also fail.
What We’re Seeing From The Stock
Unfortunately, with the news that INCY and MRK failed to show any statistical significance surrounding an IDO-related treatment, things just aren’t going well for NewLink Genetics. Considering the negative data, investors are fearful that the company is trying to create a treatment that simply isn’t going to work. So, these investors are panicking and selling the stock off. Of course, our partners at Trade Ideas were the first to alert us to the declines. At the moment (9:40), NLNK is trading at $4.60 per share after a decline of $2.72 per share or 37.09% 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 NLNK. In particular, we’re interested in following the ongoing clinical trials to see if the company is able to make its IDO-related treatments work. Nonetheless, this may indeed be a futile mission. We’ll continue to follow the story closely and bring the news to you as it breaks!
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