(Reuters) – Shares of drug developer Acelyrin slumped 57% in premarket trading on Tuesday after the company’s experimental lead drug failed to show it was effective enough in reducing symptoms of an inflammatory skin disease.
The California-based company’s shares were trading at $12.11 before the opening bell, about 33% below their initial public offering (IPO) price in May. The Acelyrin IPO was one of the biggest debuts in the sector this year amid a funding crunch among small biotech companies.
The mid-to-late stage trial tested izokibep in patients with Hidradenitis Suppurativa (HS), a chronic inflammatory skin condition that causes painful lumps under the skin.
The drug did not meet the main goal of statistically significant reduction in abscesses and inflammatory nodules versus a placebo, the company said.
The company said the trial was hit by early discontinuations as well as an increase in placebo rates.
Jefferies analyst Akash Tewari slashed his price target on the stock to $15 from $31, calling the data “painfully disappointing.”
“It’s difficult to glean much from the data given how poorly the trial was run. We’ll also need more clarity on the regulatory path forward,” he said.
(Reporting by Christy Santhosh in Bengaluru; Editing by Saumyadeb Chakrabarty)
