Regulus Therapeutics Inc (NASDAQ:RGLS) Slashed By Half Following An FDA Study Halt Notice
tags: RGLS
The shares of Regulus Therapeutics Inc (NASDAQ:RGLS) took quite a heavy beating yesterday as the U.S. Food And Drug Administration put the brakes on its RG-101, the biotech’s leading drug candidate, after the biotech reported a second serious adverse effect (SAE) of jaundice possibly related to RG-101’s performance in its clinical studies.
As a result, RGLS shares closed the June 28 trading session at $2.54 per share, almost 50% cheaper than the day before, thus evaporating $66.5 million worth of stock in a single day of trade. This happened on a record-breaking volume of 6.9 million, or ten times higher than average.
Is the situation that bad for Regulus and are traders right to expect the apocalypse for RGLS, though?
A quick review of Regulus’s development since inception in 2007 shows that the biotech seems to be taking the right steps towards growing the business. The company is mainly focused on developing novel medicines to both ensure the correct functioning of microRNAs – small molecules responsible for regulating most genes in the genome – and correct any imbalance arising from microRNA dysregulation, the main culprit for a number of life-threatening diseases. Regulus’s product pipeline currently encompasses three product candidates – RG-101, RG-012 and RG-125 – engaged in multiple clinical trials for the treatment of hepatitis C virus (HCV) infection, Alport syndrome, and Non Alcoholic Steatohepatitis (a/ka NASH) in type 2 diabetes patients, respectively.
While the first SAE of jaundice occurred in RGLS‘s HCV 4-week regimen – a study evaluating RG-101’s efficacy when used in conjunction with commercially available Direct-Acting Anti-HCV agents (DAAs) over the course of four weeks – it is not clear if the second jaundice case occurred in the same study (though one could safely assume it did). According to RGLS‘s management, this will not hamper any of the three ongoing RG-101 studies and the positive top line data announced earlier this month certainly back up this theory.
Yesterday, the U.S. Food and Drug Administration officially allowed a drug called Epclusa to start hitting the shelves. Guess what this drug has been approved for? The treatment of chronic hepatitis C virus infection, of course. Ironically enough, this happened less than 24 hours after the agency called a halt on Regulus’s RG-101 HCV study. A double bummer for Regulus, no doubt. What is in doubt, however, is whether RGLS shares will crawl out of this pothole sooner rather than later. Strong endpoint data in the months to come would not hurt for a start as long as they become a reality.
