Credit: Image source: Getty Images.What happened
Shares of Tesaro, Inc. (NASDAQ: TSRO) were down 10.8% as of 3:38 p.m. EDT on Monday. The decline appeared to be related to two developments. One was that analysts at investment bank Cowen reaffirmed its hold rating for the biotech stock, with a one-year price target of $38 per share. Tesaro's share price opened on Monday 10.5% higher than Cowen's price target.
Perhaps the more important news, though -- and likely the primary reason behind Cowen's rating for Tesaro stock -- was that AstraZeneca (NYSE: AZN) and Merck & Co. (NYSE: MRK) reported very encouraging results from a phase 1 study of PARP inhibitor Lynparza at the European Society for Medical Oncology (ESMO) Congress over the weekend. Lynparza is a major rival to Tesaro's ovarian cancer drug, Zejula.
Image source: Getty Images.
So what
Tesaro made its own presentation of data at ESMO from a phase 1 clinical study of anti-PD-1 antibody TSR-042. Although the updated results were positive, it's still really early for TSR-042. And AstraZeneca's results for Lynparza overshadowed Tesaro's presentation.
AstraZeneca and Merck reported that 60% of ovarian cancer patients receiving Lynparza experienced progression-free survival after three years, compared to 27% of patients on placebo following platinum-based chemotherapy. Thus far, Lynparza is the only PARP inhibitor to show an improvement in progression-free survival when used as a first-line maintenance therapy for ovarian cancer.
The good news for Lynparza wasn't so great for Tesaro's PARP inhibitor, Zejula. Although sales for Zejula grew from $26 million in the second quarter of 2017 to $54 million in Q2 of 2018, Tesaro lowered its full-year revenue outlook for the drug. The biotech is already running into fierce competition from Lynparza and Clovis Oncology 's PARP inhibitor Rubraca; the latest data from AstraZeneca and Merck could make it even harder for Tesaro to compete.
Now what
Tesaro has a few opportunities over the next few weeks to make positive impressions on investors. The biotech reports third-quarter financial results on Nov. 1. It also presents data at the Society for Immunotherapy of Cancer (SITC) Annual Meeting on Nov. 9.
10 stocks we like better than Tesaro
When investing geniuses David and Tom Gardner have a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor , has quadrupled the market.*
David and Tom just revealed what they believe are the 10 best stocks for investors to buy right now... and Tesaro wasn't one of them! That's right -- they think these 10 stocks are even better buys.
Click here to learn about these picks!
*Stock Advisor returns as of August 6, 2018
Keith Speights 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.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
