Amid some rather impressive volatility today, Protagonist Therapeutics (NASDAQ:PTGX) is one of the biggest stock market losers. At one point today, this stock lost more than two-thirds of its value in one swoop, as investors sold PTGX stock on extremely heavy volume.
As a biotech stock, significant volatility is pretty standard. For Protagonist, a company with various drugs in different stages of development, updates with regards to how clinical trials are going can be big catalysts.
Today, one of Protagonist’s investigational products is providing this negative catalyst. The company made an announcement that clinical trials of the company’s rusfertide (PTG-300) drug aimed at polycythemia vera patients would be halted by the FDA.
Let’s dive into the announcement, and why investors are running for the hills with PTGX stock today.
PTGX Stock Plummeting on Tumors Found in Mice
Today, Protagonist announced that it had received verbal confirmation from the FDA that its rusfertide drug would be placed on clinical hold by the FDA. Any sort of hold is a big deal. Indeed, investors appear to have reason for concern surrounding the reasons for this hold.
Reportedly, Protagonist’s recent notification to the FDA of malignant subcutaneous skin tumors in mice treated with rusfertide was the catalyst for this hold. Protagonist has acknowledged the severity of these findings. Accordingly, the company plans on putting its ongoing clinical trial on hold and notifying patients who have been involved in this study.
Various analysts have pointed to the severity of these findings as potentially disastrous for PTGX stock. That’s because the majority of the company’s expected stock price is tied to rusfertide. Accordingly, the shuttering of clinical trial efforts for this drug may be a fatal (or near-fatal) blow.
For now, investors appear to agree. However, value investors may want to keep this stock on their radar, depending how far and how fast this falls.
On the date of publication, Chris MacDonald did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.