Bengaluru: Wave Life Sciences shares plunged 58% on Thursday after a higher dose of its experimental obesity drug failed to show a clear improvement at reducing a dangerous type of belly fat.
The Cambridge-based company’s market value is set to fall by about $1.35 billion, if losses hold.
In an early-stage trial, patients who received one injection of Wave’s drug, WVE-007, at the higher 400-milligram dose lost about 5% of visceral fat – the dangerous fat that builds up around internal organs – after three months.
But this did not show a clear improvement over the 14% visceral fat loss after six months for those who got 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.
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.
The mid-stage study including higher BMI patients with multiple doses will be needed before the obesity thesis can be properly evaluated, B. Riley Securities analyst Madison El-Saadi said.
In the reported study, patients on the 240-mg dose lost about 0.9% of their body weight on average compared with placebo after six months of follow-up.
Wave executives said the weaker-looking result reflected who was enrolled, and not the drug’s limits.
The 400-mg group started with “notably healthier” body composition, including about 30% less visceral fat at baseline, Chief Medical Officer Chris Wright told investors on a conference call.
