The stock is sinking for San Diego biotech Mirati Therapeutics $MRTX following news that the company is siphoning resources from its lead drug to fund its newer immuno-oncology program.
The company’s most advanced drug is glesatinib, which was in Phase II trials for non-small cell lung cancer and other solid tumors. But apparently that program is no longer the most promising in Mirati’s pipeline.
“Glesatinib has demonstrated clinical activity and acceptable tolerability in MET-altered NSCLC patients,” the company’s statement reads. “However, in light of superior investment opportunities in its pipeline, the company will suspend further investment in glesatinib and will pursue opportunities to partner the program.”
Mirati said it will present data on glesatinib at an upcoming medical conference.
Analysts at Jefferies wrote in an investment note that de-prioritization is connected to competition in the space.
“Off label crizo (crizotinib, or branded Xalkori) is likely creating and will continue to create enrollment challenges,” the analysts stated. “We view the glesa de-prioritization as prudent.”
Mirati did not respond to requests for an interview regarding glesatinib’s downgrade.
The company’s resources are being directed instead to sitravatinib, which is also meant to treat NSCLC patients. Mirati’s stock performance boomed in Q3 (+216%) following early data that sitravatinib was performing well in Phase II combo trials with BMS’ Opdivo (nivolumab).
“We are very encouraged by the early results from our sitravatinib immuno-oncology program,” said Mirati’s CEO Charles Baum in a statement. “We are focusing on accelerating this promising opportunity with sitravatinib and advancing our potentially first-in-class KRAS program, both of which address large underserved patient populations with significant market potential.”
Mirati’s stock is slipping on the news, with shares down 15% by late Tuesday afternoon.
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