On Thursday, shares of Cerulean Pharma (CERU) tanked by 54% to $1.26 per share with heavy volume. The reason for the large drop was the company's announcement on Wednesday that its phase 2 kidney cancer therapy trial failed to meet on the primary endpoint of the study.
The company's drug CRLX101 was being tested in combination with Roche'z (RHHBY) Avastin. The drug combination was being tested against investigators' choice of drug -- like a standard of care drug -- for treatment. The drug failed to improve patients' median progression-free survival and the objective response rate, but was safe to take and well tolerated.
Since CRLX101 is the lead drug candidate for the company, the trial failure puts the company behind in terms of being able to get a drug to market. The CEO and company mentioned that they will evaluate the full set of data to see why the trial failed. They stated that this data was a shock to them, because the prior trial had very encouraging results. However, about three years ago CRLX101 also failed another cancer trial in patients with non-small cell lung cancer.
With this major setback, the company has announced that it will cut 48% of its workforce in order to save about $5 million a year. Its market cap is down to about $32M.
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