Shares of Wave Life Sciences plunged 58% on Thursday after a higher dose of its experimental obesity drug failed to demonstrate a clear benefit in reducing a harmful type of abdominal fat.
The Cambridge-based company’s market value is on track to drop by around $1.35 billion if the losses continue.
In an early-stage trial, patients who received a single injection of WVE-007 at the higher 400-milligram dose showed about a 5% reduction in visceral fat—the harmful fat that accumulates around internal organs—after three months.
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However, this did not demonstrate a clear advantage over the 14% reduction in visceral fat seen after six months in patients who received the 240 mg dose.
“Investors are likely discouraged by the 400 mg data at 3 months, which look similar on visceral fat as 240 mg and not as good on total fat and lean mass,” a Leerink Partners analyst said in a note.
“Wave delivered half of what we were hoping to see for WVE-007,” said Cantor analyst Steve Seedhouse.
Executives at Wave Life Sciences said the weaker-looking results were due to differences in the patient group rather than limitations of the drug itself.
The 400-mg group began the trial with a “notably healthier” body composition, including about 30% less visceral fat at the start, Chief Medical Officer Chris Wright told investors during a conference call.
CEO Paul Bolno said the company expects “substantially larger effects” when it moves to heavier patients in its upcoming mid-stage study, which will enroll people with BMIs of 35 to 50.
According to B. Riley Securities analyst Madison El-Saadi, a mid-stage trial involving patients with higher BMI and multiple dosing will be necessary to properly assess the drug’s potential in treating obesity.
In the current study, patients who received the 240-mg dose lost an average of about 0.9% of their body weight compared to those on placebo after six months of follow-up.
