What happened
Shares of Zai Lab (ZLAB 3.01%) were down more than 13% Wednesday morning, a day after the biotech company reported phase 3 trials for an oncology therapy it is developing with NovoCure. Zai Lab's stock is down more than 5% so far this year.
So what
Zai Lab said that its tumor treating fields (TTFields) therapy, which uses skin patches to deliver electric fields to areas of the body, when used with standard therapies, met its primary endpoint of three-month improvement in median overall survival (OS) in metastatic non-small cell lung cancer (NSCLC) patients. The results were presented at the 2023 American Society of Clinical Oncology annual meeting in Chicago. According to Zai Lab, patients with the TTFields therapy had a median OS of 13.2 months compared to 9.9 months with patients who just had standard therapies.
Investors were apparently unimpressed with the results. The curious thing, though, is that NovoCure's shares barely fell on the news and were down only 1% Wednesday morning.
One reason doubts may be creeping in for investors is 70% of the study participants didn't use an initial checkpoint inhibitor, such as Keytruda from Merck, which is seen as the leading way to treat NSCLC. In other words, the concern was that the study was skewed by comparing TTFields to a lesser therapy.
Now what
The tumble may be a bit of an overreaction considering the depth of Zai Lab's pipeline and that it increased revenue in the last quarter while trimming losses. In the first quarter, it reported revenue of $62.8 million, up 36.2% year over year. The company reported a loss in net income of $49.1 million, compared to a loss of $82.4 million in the same period a year ago. Even if the study is unimpressive, the company has plenty of other products in the mix.
