Here’s why Galapagos stocks are dropping today
Actions of Galapagos (NASDAQ: GLPG), a biopharmaceutical company, are under pressure following clinical trial readings for a few new drug candidates in Phase 1 studies. Disappointing results from the company’s Toledo program lowered the stock 13.1% to 3:52 p.m. EDT Thursday.
Following the implosion of Jyseleca in the USA, Galapagos has relied on its early clinical stage pipeline to gain investor attention. The company has invested heavily in the Toledo program, a series of new drug candidates targeting salt-inducible kinases.
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Galapagos stock is down today as the company reported disappointing data for the first clinical-stage candidate to emerge from the Toledo program. After six weeks of treatment, the rheumatoid arthritis patients randomized to receive GLPG3970 were no better off than the placebo group.
Patients with ulcerative colitis who received GLPG3970 improved their Mayo Clinic score, a measure of disease severity, by 2.7 points on average. Unfortunately, the score of the placebo group improved by 2.6 points.
If there is any future for GLPG3970, it is as a treatment for psoriasis. Four of the 13 patients with psoriasis treated with GLPG3970 had an improvement of 50% or more compared to any of the patients who received placebo.
Galapagos also reported the first results of a psoriasis study with GLPG3667, a TYK-selective compound. After four weeks, treatment with GLPG3667 resulted in an improvement of 50% or better for four out of 10 high dose patients. None of the patients in the low dose cohort achieved a 50% improvement.
Fairly positive data on psoriasis is better than nothing, but none of these new drug candidates seem to have what it takes to finally succeed in a commercial setting. Skyrizi, a successful psoriasis treatment AbbVie launched in 2019 led to 90% improvements for 75% of patients treated in clinical trials leading to its approval.
After watching Galapagos stocks lose around 70% of their value over the past year, contrarian investors might be thinking about grabbing that falling knife. Considering how many disappointments this company has already delivered, it’s probably best to watch its story unfold from a safe distance.
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