Why Gilead Sciences stock crashed on Monday

Mainstream in the pharmaceutical sector Gilead Sciences (Guild -10.15%) We’ve had many good days on the stock exchange, but Monday was not one of them. Disappointing clinical trial results for one of its investigational drugs led investors to send the company’s stock price down more than 10%. And that was the day the bell rang. S&P 500 The index closed in positive territory, up nearly 0.3%.

Trodelvy does not meet the latest default endpoints.

The trial was a late-stage clinical trial of Trodelvy, an approved cancer drug. Gilead was hoping to expand Food and Drug Administration (FDA) approval to include patients with advanced or metastatic non-small cell lung cancer (NSCLC) who progressed after receiving platinum-based chemotherapy and checkpoint inhibitor therapy.

Unfortunately, in the Phase 3 study, Trodelvy did not meet the primary endpoint of overall survival (OS) in drug recipients.

“This study observed a numerical improvement favoring SG in overall survival (OS), including patients with squamous and non-squamous histology,” Gilead said.

NSCLC is the most common form of lung cancer. Therefore, a common outcome of clinical trials is frustration for relatively large patient populations.

Gilead quoted Chief Medical Officer Merdad Parsey as saying that the drug company will continue to work to identify metastatic NSCLC patents that could benefit from Trodelvy.

$21 billion gamble

Gilead continues to have lofty ambitions for its cancer drugs, which were a star asset when the company acquired peer Immunomedics for $21 billion in 2020. Monday’s investor reaction feels a bit overblown, as there are other avenues of research that could be pursued to develop this drug. Gilead bulls may do well to hold on to the stock despite the sell-off.