Q32 Bio (NASDAQ: QTTB) accentuated the positive when it delivered mixed results from a pair of mid-stage clinical trials assessing its lead pipeline candidate bempikibart—one in alopecia areata (AA), the other in atopic dermatitis (AD)—but investors and analysts gravitated to the negative, sending the company’s shares cratering 85% this past week, closing $0.03 above its 52-week low on Friday.
Q32 played up its decision to advance bempikibart in AA, with plans to initiate Part B enrollment in the first half of 2025. The company cited topline positive results from its 44-patient, placebo-controlled Phase IIa SIGNAL-AA trial (NCT06018428), assessing 200 mg bempikibart given subcutaneously every other week in adults with severe and very severe AA and baseline Severity of Alopecia Tool (SALT) scores of 50–100.
At week 24, patients treated with bempikibart showed a mean reduction in SALT score of 16% vs a 2% reduction among placebo patients. Nine percent of bempikibart patients achieved SALT score less than or equal to 20, vs. 0% for placebo. That SALT-20 score rose to 13% at week 26, while placebo patients remained at 0%.
“We believe bempikibart has the potential to be an important new treatment option in a disease needing new and safer alternatives to currently approved agents,” Q32 CEO Jodie Morrison said in a statement, referring to AA.
Based on data from SIGNAL-AA, Q32 plans to enroll about 20 additional patients into a Part B expansion of the trial, including a loading regimen.
Bempikibart is a fully human interleukin-7 receptor alpha (IL-7Rα) monoclonal antibody designed to block signaling mediated by IL-7 and TSLP, thus re-regulating adaptive immune homeostasis. Q32 reasons that because both are central drivers of inflammation and autoimmunity, blocking IL-7 and TSLP holds therapeutic potential in a broad range of inflammatory and autoimmune diseases fully.
Within its announcement, Morrison also conveyed the company’s disappointment that bempikibart failed its Phase IIa SIGNAL-AD trial (NCT05509023) by not achieving its primary endpoint—namely the mean percent change from baseline to week 14 in patients’ Eczema Area and Severity Index (EASI) scores. Instead, while bempikibart could boast of a 74% improvement, placebo showed slightly better improvement at 76%.
“Based upon the findings, including the high placebo rate, we plan to conduct a review to better understand the results,” Morrison stated.
Selloff mode
However, investors weren’t giving Q32 any benefit of the doubt, instead switching gears to selloff mode. On Wednesday, the day after the company’s announcement, shares plunged 76% from $24.41 to $5.95. Q32’s shares continued to plummet, nosediving 29% Thursday to $4.25, then falling another 13% Friday to $3.70.
Investment firms covering Q32 stock largely sided with investors. At deadline, four analysts downgraded the company’s shares, one of whom also joined three other analysts in lowering their 12-month price targets on the stock.
Leerink Partners analyst Thomas J. Smith cut his firm’s rating of Q32 stock from “Outperform” to “Market Perform,” and slashed the firm’s 12-month price target on Q32 shares 87%, from $68 to $9. Smith called the results from both trials disappointing, especially in AD: “While the placebo response is among the highest we have observed in AD, QTTB has not identified any specific drivers leading to this outsized response and does not expect to advance bempi in AD.”
Smith acknowledged that in AA, bempikibart “demonstrated a real, albeit modest, efficacy signal in this initial dataset, but said the positive results were tempered by the exclusion of three placebo patients from one study site due to protocol violations, as well as by early discontinuation of treatment by some patients, which he said, “may further confound interpretation of this signal.”
“Wait and see”
“Overall, we expect investors will adopt a ‘wait and see’ approach before their confidence is restored in QTTB’s ability to execute across its clinical programs following the recent setback,” Smith added.
Also downgrading Q32 shares:
- Guggenheim (Yatin Suneja)—From “Buy” to “Neutral.”
- Wells Fargo (Derek Archila)—from “Overweight” to “Equal Weight.”
- Raymond James (Steven Seedhouse)—from “Strong Buy” to “Outperform.”
Raymond James was also one of four firms that cut their price targets on Q32 shares, carrying out a 76% reduction from $90 to $22. The other three:
- BMO Capital (Etzer Darout)—Down 66%, from $64 to $22, but maintaining “Outperform” rating.
- Piper Sandler (Christopher Raymond)—Down 76%, from $85 to $20, but maintaining “Overweight” rating.
- Oppenheimer (Jay Olson)—Down 75%, from $80 to $20, but maintaining “Outperform” rating.
Olson expressed disappointment that bempikibart failed to advance in AD. But the Oppenheimer analyst added that the AA opportunity remained underappreciated by investors despite a mechanism of action that could make the drug differentiate and stand out from competitors in a highly underserved disease dominated by JAK inhibitors, TipRanks reported.
Q32 regained full development and commercial rights to bempikibart in November 2023 from Amgen, which inherited the drug when it acquired Horizon Therapeutics for $27.8 billion in a deal completed a month earlier following the announcement in 2022. That year, Q32 and Horizon agreed to partner on developing the drug, then called ADX-914, for autoimmune diseases.
Citi, Jefferies, Morgan Stanley downgrade BioAge
No sooner did BioAge Labs (NASDAQ: BIOA) shares plunge 67% on December 6 after a safety issue prompted the company to end its ongoing Phase II STRIDES trial (NCT06515418) of its lead pipeline candidate, than three of the four analysts covering the company downgraded its shares.
Citi analyst Samantha Semenkow, PhD, downgraded BioAge shares from “Buy” to “Neutral/High Risk,” citing the unexpected safety setback that resulted after liver transaminitis without clinically significant symptoms was seen in some subjects receiving the company’s lead pipeline candidate, the oral apelin receptor (APJ) agonist azelaprag, as monotherapy and in combination with Eli Lilly’s Zepbound® (tirzepatide).
Elevated liver enzymes were seen in 11 of the study’s 204 enrolled participants. The company didn’t pinpoint which arm of the trial saw transaminase elevations, but did say they were not seen in the tirzepatide-only treatment group.
“While BioAge didn’t specify which azelaprag treatment groups the liver signal was observed in, our impression after speaking with management is that the signal was observed in both the monotherapy and tirzepatide combo arms,” Semenkow commented in a research note.
Also unclear, Semenkow added, was whether the liver enzyme elevations were related to an obese patient population, the azelaprag dosages used in the study, the length of dosing, or to targeting apelin in general.
“We find the emergence of liver tox surprising given azelaprag’s clinical safety profile to date had been very clean. That said, we acknowledge the liver signal limits azelaprag’s path forward in obesity, and discontinuation of STRIDES removes a significant catalyst for shares,” Semenkow added. “As a result, we see limited potential for upside over the next ~12 months.”
Semenkow also slashed Citi’s 12-month price target on BioAge shares by 84%, from $45 to $7.
Possible explanation
Also lowering its price target on BioAge shares to $7 from $42—an 83% implosion—was Jefferies equity analyst Roger Song, MD. In echoing Semenkow that the liver signal was a surprise, Song offered a possible explanation why: Liver tox never arose as an issue across eight Phase I studies carried out by BioAge and Amgen, nor in various preclinical tox studies, with genetic studies only showing benign safety effects. However, in the eight Phase I studies, the dose of azelaprag given to patients was 100 mg QD for up to 21 days, with the highest single dose being a 1.6 mg single dose given in an Amgen study.
“However, this is the first time pts [patients] are being exposed to aze[laprag] at these Ph2 obesity doses (300 mg QD or BID) for a long period,” Song wrote in a December 9 research note, adding that in previous trials, the highest dose of 300 mg BID was tested for two weeks at the longest.
Song observed that the liver signal “could be a property with Aze[laprag] at high dose and long exposure, but does not rule out other reasons including interaction with tirze[patide], pt [patient] baseline, etc.” The timing of when the liver signal emerged has not been disclosed, though Song noted that randomization of patients started in July.
BioAge licensed azelaprag from Amgen in 2021, in return for agreeing to pay Amgen an upfront payment as well as payments tied to achieving development and regulatory milestones—all undisclosed—plus royalties based on annual net sales. Amgen also received shares in BioAge, which agreed to oversee all development, manufacturing, and commercialization of the drug, originally known as AMG 986 and later as BGE-105 before it was renamed azelaprag.
Morgan Stanley analyst Jeffrey Hung downgraded BioAge shares from “Equal Weight” to “Underweight” and chopped his firm’s price target 87.5%, from $40 to $5.
While BioAge plans to pivot its R&D efforts toward a CNS-penetrant NLRP3 inhibitor being developed to target metabolic diseases and neuroinflammation, no clinical data is expected to emerge from that program until at least 2026, Morgan Stanley noted as reported by Investing.com.
Leaders and laggards
- Candel Therapeutics (NASDAQ: CADL) shares more than doubled, soaring 113% over two days after the company announced positive results from a Phase III trial (NCT01436968) of the viral immunotherapy CAN-2409 in intermediate-to-high-risk, localized prostate cancer patients. CAN-2409 met the trial’s primary endpoint by showing statistically significant improvement in disease-free survival in patients who received treatment plus standard-of-care (SoC) radiation therapy (the prodrug valacyclovir) combined with SoC, compared to SoC alone. A 14.5% relative improvement in disease-free survival (DFS) was observed at 54 months for the CAN-2409 treatment arm vs. the placebo control arm. DFS improvement was seen both in patients receiving short-term ADT and in patients not receiving ADT. Shares climbed 68% from $4.61 to $7.75 Wednesday, then jumped another 26% to $9.80 Thursday.
- CervoMed (NASDAQ: CRVO) shares plunged 79% from $10.25 to $2.16 Tuesday after the company acknowledged that its lead program to develop neflamapimod to treat dementia with Lewy bodies failed the Phase IIb RewinD-LB trial (NCT05869669). Neflamapimod failed to achieve the trial’s statistical significance thresholds for its primary endpoint of change in the Clinical Dementia Rating Sum of Boxes (CDR-SB) or any of the study’s key secondary endpoints—including change from baseline in Timed Up and Go (TUG) test, change from baseline in a Neuropsychological Test Battery (NTD) and the Clinician’s Global Impression of Change (CGIC). CervoMed said an initial analysis showed that target plasma drug concentrations were not achieved during the trial’s double-blind phase, “which may have adversely impacted trial results.”
- Chimerix (NASDAQ: CMRX) shares more than tripled, rocketing 238% over three days, after the company said late Monday it planned to submit a complete New Drug Application (NDA) seeking accelerated approval for dordaviprone as a treatment for recurrent H3 K27M-mutant diffuse glioma in the United States before year-end, following “extensive” dialogue with the FDA. “In anticipation of a potential approval, we have bolstered our commercial leadership team and will be ready for a U.S. launch as early as the third quarter of 2025, pending application acceptance and Priority Review, if granted,” CEO Mike Andriole stated. Chimerix said it intends to apply for a Rare Pediatric Disease Priority Review Voucher in its upcoming NDA submission. Shares catapulted 217% from $0.87 to $2.76 Tuesday, then increased 8% to $2.98 Wednesday before dipping 1% Thursday to $2.94.
- uniQure (NASDAQ: QURE) shares more than doubled, zooming 110% from $7.30 to $15.30 Tuesday after the company said it reached an agreement with the FDA on key elements of an Accelerated Approval pathway for its Huntington’s disease candidate AMT-130. After a Regenerative Medicine Advanced Therapy (RMAT) Type B meeting held in November, the FDA agreed that data from ongoing Phase I/II studies, compared to a natural history external control, may serve as the primary basis for a BLA submission, avoiding the need for an additional pre-submission study. The FDA also agreed that a composite Unified Huntington’s Disease Rating Scale (cUHDRS) could serve as an intermediate clinical endpoint and that reductions in neurofilament light chain (NfL) measured in cerebrospinal fluid (CSF) may serve as supportive evidence of therapeutic benefit in the accelerated approval application.
