Track the companies that matter to you. It's FREE! Click one of these fan favorites to get started: Apple; Google; Ford.



Why Oncomed Pharmaceuticals Inc. Got Slaughtered Today

What happened

When it rains, it pours for OncoMed Pharmaceuticals (NASDAQ: OMED  ) . The biotech was down 35% at 1:57 p.m. EDT after announcing a double dose of bad news.

So what

The biotech's phase 2 trial, called YOSEMITE, tested its drug candidate demcizumab in patients with metastatic pancreatic cancer. It failed to show that demcizumab added to Abraxane and gemcitabine worked better than just the combination of Abraxane and gemcitabine.

Both treatments produced a median progression-free survival -- that's how long it takes for the tumor to start growing or death, whichever comes first -- of 5.5 months. Overall survival didn't look any better, with a median survival rate of 13.2 months for the patients treated with demcizumab, Abraxane, and gemcitabine, while the median overall survival for the group treated with Abraxane and gemcitabine couldn't be calculated because less than half of the patients had died.

Paper with "Diagnosis: pancreatic cancer" written on it

Image source: Getty Images.

Separately, OncoMed Pharmaceuticals announced that its partner Bayer decided not to exercise its option to license two other drugs in OncoMed's pipeline, vantictumab and ipafricept, for "strategic reasons."

If Bayer's decision was really because the phase 1 drugs didn't fit into its pipeline, the decision could be a windfall for OncoMed Pharmaceuticals. Bayer has already paid over $90 million in upfront and milestone payments, and now OncoMed can license them to another company.

But the worry is that vantictumab and ipafricept don't fit into Bayer's strategy because the German pharma isn't excited about the drugs' potential. Both drugs are in ongoing phase 1 trials, and while interim data presented last year looked promising, Bayer has presumably seen more data since the last public update.

Now what

OncoMed is down, but certainly not out.

For demcizumab, the biotech has an ongoing phase 2 trial called DENALI in patients with non-small cell lung cancer. While the YOSEMITE trial data shouldn't give investors much confidence in positive results from DENALI, it's possible that demcizumab's target, a protein called DLL4, might be more important for lung cancer progression than for pancreatic cancer.

OncoMed also has a phase 2 trial called PINNACLE, testing another drug, tarextumab, in small cell lung cancer; it is due to read out data in the first half of this year, which could increase OncoMed's valuation in the short term.

And if OncoMed can repartner vantictumab and ipafricept, investors will be more confident that the issue was with Bayer and not the drugs' potential.

10 stocks we like better than OncoMed Pharmaceuticals
When investing geniuses David and Tom Gardner have a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market.*

David and Tom just revealed what they believe are the 10 best stocks for investors to buy right now... and OncoMed Pharmaceuticals wasn't one of them! That's right -- they think these 10 stocks are even better buys.

Click here to learn about these picks!

*Stock Advisor returns as of April 3, 2017

Read/Post Comments (0) | Recommend This Article (0)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Compare Brokers

Fool Disclosure

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 4012661, ~/Articles/ArticleHandler.aspx, 4/29/2017 1:33:04 AM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Today's Market

updated 4 hours ago Sponsored by:
Change down DOW 20940.5 -40.8 -0.2%
Change down S&P 500 2384.2 -4.6 -0.2%
Change down NASD 6047.6 -1.3 0.0%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes

Related Tickers

4/28/2017 4:00 PM
OMED $3.94 Down -0.06 -1.50%
OncoMed Pharmaceut… CAPS Rating: ****

Article registration testing

Revisit this page

Clear article's cache and revisit this page

Or, visit the current page, forcing Test ID to article:interrupt:106919 and

Tookie Value = 51653687830026488311792316346618