Why Infinity Pharmaceuticals is Failing?

Infinity Pharmaceuticals experienced the biggest crash in the stock market last Tuesday.  The company shares fall by almost two third after a mid-stage clinical trial result was released. Although, the DYNAMO Study was able to meet the primary end-goal of the study, the stock still crashed for some other reasons.

The shares of Infinity were down for almost 70% at $1.35 with an analyst price target of $12.50 and 52-week trading range of $1.33 to $11.78.

In the experimental study, the company’s candidate drug duvelisib showed an overall response rate of 46%. There were 129 patients suffering from an indolent form of non-Hodgkin Lymphoma who participated in the study.  The patients reported some side-effects which are clinically manageable and reversible.

They conducted a Phase 2 registration-focused monotherapy study evaluating the safety and efficacy of duvelisib. Infinity’s candidate drug is an oral, investigational and dual inhibitor of PI3K-delta and PI3K-gamma or phosphoinositide-3-kinase in patients with refractory iNHL.

But the bad news is, AbbVie Inc. has a continuing collaborative discussion with Infinity to explore the possibilities of working with duvelisib.  Considering that the business discussion is still ongoing, both companies decided to pause the Phase 1b/2 study which will be sponsored by AbbVie.  The study will evaluate the efficacy of duvelisib if combined with venetoclax.

In addition, Infinity is having a strategic restructuring that will close the discovery research team.  This move may affect 46 members of Infinity or around 21% of the company’s workforce.

The company also mentioned that their financial guidance for 2016 should not be relied up.

The CEO and President of Infinity, Adelene Perkin said in a statement that the DYNAMO study has met its primary endpoint and the company hopes that duvelisib will be used as a monotherapy treatment. Their candidate drug may provide a larger benefit clinically for patients having an advanced form of indolent non-Hodgkin lymphoma, which is a very difficult disease to treat.  The company plans to seek the feedback from Food and Drug Administration to know what will be their next step for duvelisib.

AbbVie shares were also down from 0.6% to $59.56.  The price target is $70.00 and a 52-week range of 445.45 to $71.60.

The Massive Share Loss of Infinity

Infinity has suffered a massive stock loss despite having met their primary end-point.  Probably, the investors lost their trust and confidence considering that there are many things that are going on with the company. The restructuring showed that a large number of employees will be out of the company’s workforce. More so, they are going to dissolve the discovery research team which is a very important part of any organization.

The company has also plans of putting their clinical trial on hold, which would delay the entire process.  Probably, the investors are not pleased with these multiple changes that caused 70% stock market loss.

Infinity should put their plans on a fast track, and make sure that they are making the right choices so they can regain their company.  They should also assure the shareholders that what they are doing is for the benefit of the customers, the company and their investors, as well.

 

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