FibroGen (NASDAQ:FGEN) stock is heading lower on Monday after the company’s Phase 3 clinical trial failed to meet its primary endpoint.
This was a trial of pamrevlumab as a treatment for patients suffering from IPF. According to a press release, the study failed to reach its primary endpoint of change from baseline in forced vital capacity (FVC) after 48 weeks.
Mark D. Eisner, MD, MPH, Chief Medical Officer at FibroGen, said the following about the clinical trial results:
“We are deeply disappointed that these results do not support pamrevlumab as a new treatment for IPF. FibroGen would like to thank the patients and clinical trial investigators for their dedication to participating in this study.”
As a result of the poor clinical trial results, FibroGen intends to discontinue the second Phase 3 clinical trial of pamrevlumab. In addition to this, it announced plans for a significant cost reduction effort in the U.S. to extend its cash runway into 2026.
What This Means for FGEN Stock
The failed clinical trial result is bad news for FibroGen and investors in its shares. The company will have to change priorities in how it operates to deal with the blow of spending research and development costs on a failed product.
That has investors worried about keeping their stakes in FGEN stock. As a result, more than 13 million shares have changed hands as traders unload the stock. To put that in perspective, its daily average trading volume is about 1.1 million shares.
FGEN stock is down 80.9% as of Monday morning.
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On the date of publication, William White 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.
