Why Shares of Annexon Are Plummeting Thursday

What happened

Shares of Annexon (NASDAQ: ANNX) were down more than 57% on Thursday after the company reported mixed results for an eye disease therapy late Wednesday. The clinical-stage healthcare company focuses on complement-mediated autoimmune, neurodegenerative, and ophthalmic diseases. Its stock is down more than 57% so far this year.

So what

Annexon said in a phase 2 study that ANX007, a therapy to treat the eye disease geographic atrophy (GA), improved vision in patients but did not slow the growth of lesions compared to a placebo. GA is a type of age-related macular degeneration (AMD) marked by difficulty seeing in low light and reduced vision sharpness.

The trial included 270 patients, of whom some received doses of ANX007 every month, some received doses of the drug every other month, and some received a placebo every month or every other month. The average age of the patients was 80. The therapy is designed to work by inhibiting the C1q protein that is overexpressed in GA patients. While patients saw improved vision, the primary endpoint of the study was to slow the number of lesions, and the therapy didn't do that in a statistically significant way.

Now what

The bad news won't stop the company from planning for a phase 3 study of the drug.

The hope for Annexon is that the vision improvement will hold up in another study and that that will be enough for the drug to gain FDA approval. The company, as of March 31, said it had $228.2 million in cash, enough to fund operations into 2025.

The company is behind in the approval process compared to Apellis Pharmaceutical, whose drug Syfovre landed the first FDA approval for GA in February, and Iveric Bio, whose GA therapy, avacincaptad pegol, has a Prescription Drug User Fee Act (PFUFA) decision deadline from the FDA on Aug. 19. Iveric is in the process of being bought by Astellas Pharmaceutical.

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Jim Halley has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


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