Acelyrin tumbles as skin disease drug fails to meet efficacy bar in trial (updated)

Ventyx Biosciences

12/09/2023 13:50

(Adds analyst comments in paragraphs 6 and 7, details on book
value comparison with peers in last paragraph)
    By Christy Santhosh
       Sept 12 (Reuters) - Shares of drug developer Acelyrin
 SLRN.O  slumped 56% 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 $12.16
before the opening bell, nearly 33% below their initial public
offering (IPO) price in May. The IPO was one of the biggest in
the sector this year amid a funding crunch among small biotech
companies.
    The mid-to-late stage trial tested Acelyrin's 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.
    Acelyrin said the trial was hit by early discontinuations as
well as better placebo efficacy rates.
    Analysts at Piper Sandler said they did not expect similar
dropouts in other trials of the drug, including one testing it
in patients with psoriatic arthritis.     
    However, Jefferies analyst Akash Tewari slashed price target
on Acelyrin's stock to $15 from $31, calling the latest 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.
    As of last close, Acelyrin's stock was trading at 3.39 times
the company's book value, or the value of its assets versus
liabilities, according to LSEG data, compared with 6.10 times
for rival Ventyx Biosciences  VTYX.O  and 9.64 times for Apogee
Therapeutics  APGE.O .

    

 (Reporting by Christy Santhosh in Bengaluru; Editing by
Saumyadeb Chakrabarty and Shinjini Ganguli)
 ((Christy.Santhosh@thomsonreuters.com;))