Puma Biotech Crashes After Bad News About Its Breast Cancer Drug

Puma Biotechnology Inc PBYI shares were down a whopping 21.73 percent on about 5 times its average volume. The plunge has come after a decent bump up last week since a recent low of $34.60 reached November 4.

Abstract Steps Up Safety Worries

The immediate catalyst that sent the stock on a tailspin was an abstract containing interim analysis from the multi-center, open-label, Phase II control trial evaluating Puma's neratinib.

After being halted early on in the session on hitting the circuit breaker limit, the stock has since then resumed trading,

Neratinib is the company's irreversible pan-HER inhibitor for treating early-state ad metastatic HER2 positive breast cancer. The treatment is in late-phase development.

The interim analysis, as revealed by the abstract, showed that diarrhea, the main toxicity of neratinib, which was thus far treated with loperamide prophylaxis, now has to be tackled by a combination of loperamide + budesonide.

This has given rise to fears concerning the safety of the drug and hence investors have turned paranoid, especially as the company has submitted to the FDA, marketing application for the drug.

Sell Side Analyst Polarized

The development has served to polarize sell-side analysts, with some still sanguine, while others see a real problem in hand. Citi has stepped in to defend Puma Biotechnology, saying the markets are overreacting and accordingly advised investors to buy on weakness. On the other hand, RBC analyst Simos Simeonidis views the increase in the g3 diarrhea rates from the previous cuts of loperamide prophylaxis data as a significant negative.

At the time of writing, Puma Biotechnology shares were down 21.43 percent at $39.60, off its intra-day low of $32.72.