Infinity Pharmaceuticals Inc. (NASDAQ:INFI) Slashes Value By 70% Following Less-Than-Stellar Clinical Results
What is worse than having to cease a clinical study at the end of phase one? Well, having to end it at phase two and leave stockholders incandescent with rage. Unless you have not heard of it yet, that’s exactly what the management of Infinity Pharmaceuticals Inc. (NASDAQ:INFI) did yesterday and it also did some irreversible damage on the company’s stock price.
INFI shares closed the June 14 session as the biggest loser on the stock market. Plunging almost 70% to $1.36 per share, INFI wiped a whopping $150 million off its overall market value. The fall, which is INFI‘s worst to date, occurred shortly after management revealed the imminent layoff of one-fifth of the company’s workforce in connection with the disappointing overall efficacy of an investigational drug evaluated in a phase 2 study. The drug in question is called duvelisib and it was tested as a possible treatment for patients suffering from refractory indolent non-Hodgkin lymphoma. Although duvesilib reportedly succeeded in meeting the primary endpoint of the study, its overall response rate of 46% only consisted of partial responses, thus failing to provide the clinical benefit management had hoped for.
In light of this development, CEO Adelene Perkins assured shareholders that Infinity’s management will determine what to do next after consulting with the FDA. So far, so good. At the same time, however, Perkins announced an immediate restructuring within the organization aimed at preserving financial resources at the expense of 46 employees who would lose their jobs in the soon-to-be shut down discovery research department.
The cumulative effect of all these updates is most evident on the charts – in less than a day, INFI stock has devalued from $4.40 to less than $1.40 per share. As a result, shareholders are understandably upset – so upset that some of them have already engaged law firms specialized in investigating securities fraud to determine whether certain officers have violated certain federal securities laws or not, with the ultimate goal of recovering some of their losses.
Undeniably, as long as the investigation remains active, INFI will most likely remain idle on the charts. The damage is done and a rebound will not occur unless Perkins reports a breakthrough in Infinity’s second clinical program whose advancement, by the way, has yet to be explored.
