Shares of biopharmaceutical company Kintara Therapeutics plummeted to an all-time low on Tuesday following the disappointing outcome of its lead product candidate in the treatment of glioblastoma, an aggressive form of brain tumor.
Substantial Stock Decline
Kintara’s stock dropped by 76%, reaching 90 cents per share, with a low of 85 cents during the trading session.
VAL-083 Development Suspended
The company announced its decision to suspend the development of VAL-083 after preliminary results from a Phase 2/3 study indicated that the drug did not demonstrate superiority to the current standard treatments for glioblastoma.
Shifting Focus and Strategic Options
With the setback in mind, Kintara plans to explore strategic alternatives to potentially enhance shareholder value. The company will now shift its focus towards its REM-001 platform, which shows promise as a localized cutaneous or visceral tumor treatment.
Analyst Downgrades and Financing Concerns
Maxim Group reacted to the news by downgrading Kintara shares from a buy rating to hold. Analyst Jason McCarthy stated that VAL-083 was an integral part of Maxim’s thesis on Kintara and will no longer be included in their model. Additionally, there are concerns about potential financing challenges for Kintara.
Uncertainty Surrounding Stock Offering
Kintara had recently filed with the U.S. Securities and Exchange Commission to sell over 2.33 million shares along with warrants for an additional 2.33 million shares. However, with the substantial decline in stock price, it remains uncertain how this will impact the planned offering.