This move comes following a rather impressive rise from around $30 per share to start the year to more than $120 per share at the company’s recent peak. Today’s price action has dropped this stock to below $15, a level not seen in a few years.
This move is large, even by biotech stock standards. Accordingly, let’s dive into the news driving this huge downward move in CRTX stock today.
CRTX Stock Plummets on Failed Clinical Trial for Key Drug
Cortexyme is a company focused on “altering the course of degenerative diseases.” This company’s key Alzheimer’s drug candidate was hoped to be the next success story, following the win Biogen saw with its Aduhelm drug earlier this year. However, today, the company announced a clinical trial for this drug missed its primary end goal.
In layman’s terms, this means the clinical trial failed. Executives from Cortexyme did note that measures of cognition in patients who received the company’s drug were improved. Indeed, statistically significant results are great. However, investors took this news poorly. It appears the market is pricing in a much lower chance of success for approval after these results.
That’s not to say the story’s over for Cortexyme. The company still believes its research has provided important insights into how Alzheimer’s disease works.
That said, investors banking on a key drug approval seem to have been let down today. Accordingly, this rather large move in CRTX stock appears to accurately capture the mood of the market today in this space.
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.