KalVista Pharmaceuticals (NASDAQ:KALV) is trending on popular financial social media right now, but it’s not good news. Reportedly, there were safety-related concerns over KalVista’s clinical study of a hereditary angioedema treatment. Some patients had liver enzyme elevations, so the trial was halted. KALV stock traders didn’t take the news well, and they quickly cut the share price in half.
KalVista Pharmaceuticals is a small biotechnology company with a market capitalization of less than $200 million. Its focus is on developing and commercializing small molecule protease inhibitors.
The company’s Komplete Phase 2 clinical trial for KVD824 is — or more accurately, was — intended to help prevent attacks in people with hereditary angioedema. The term angioedema describes swelling underneath the skin, which can be a serious and even life-threatening condition. In some instances, angioedema is triggered by an allergic reaction.
Discovering a treatment for angioedema is undoubtedly a priority for KalVista Pharmaceuticals — but then, so is safety. That’s why the company put a stop to the Komplete Phase 2 study. Apparently, the researchers detected liver enzyme elevations in not just one, but “multiple patients in all treatment groups of the trial.”
What’s Happening with KALV Stock?
Not to get too macabre, but KALV stock was on life support this morning. By 11:00 a.m. Eastern, more than 2 million shares traded hands (around 172,000 shares is the daily average) and the price was down more than 50% compared to yesterday’s close.
One might imagine the executives at KalVista Pharmaceuticals anticipated a share-price decline. Could they have foreseen a selloff of this magnitude, though?
After all, KalVista was only doing what needed to be done: put the safety of the patients first. According to the press release, seven out of 33 enrolled patients exhibited elevations of liver enzymes. So, halting the study was undoubtedly the right thing to do.
Besides, the story need not end here. KalVista Pharmaceuticals stated that it will “proceed to finalize the database of the trial and assess the unblinded data for efficacy and safety to determine the potential for any further development.”
In other words, there may be a resumption of KalVista’s halted clinical trial at some point. For now, though, the prevailing mood is despair as traders hastily sell their KalVista Pharmaceuticals shares.
On the date of publication, David Moadel 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.