Contineum Plunges Over 30% as MS Drug Misses Trial Goals
The clinical-stage biotech's lead drug candidate, PIPE-307, failed to meet primary and secondary endpoints in a pivotal Phase 2 study, erasing recent gains.
Shares of Contineum Therapeutics (NASDAQ: CTNM) cratered in heavy trading Friday, extending a sharp decline that began late Thursday after the company announced its lead drug candidate for multiple sclerosis failed to achieve its goals in a closely watched clinical trial.
The San Diego-based biopharmaceutical company saw its stock fall more than 26% on Thursday and continue its descent by another 14% in morning trading Friday, to $10.51 per share. The sell-off wiped out nearly a month of gains after Contineum reported that its drug, PIPE-307, missed both primary and secondary efficacy endpoints in a Phase 2 study for treating relapsing-remitting multiple sclerosis (RRMS).
In a press release issued Thursday evening, Contineum stated the VISTA trial did not show a statistically significant effect on key measures of disease activity compared to a placebo. While the company noted the drug demonstrated an acceptable safety and tolerability profile, the failure to prove efficacy is a significant setback for a clinical-stage firm whose valuation is heavily dependent on the success of its pipeline.
"We are disappointed that the VISTA trial did not meet its primary endpoint," said Carmine Stengone, President and Chief Executive Officer of Contineum. "We will continue to analyze the full dataset from the VISTA trial to determine the next steps for PIPE-307."
The market reaction underscores the perilous nature of biotechnology investing, where clinical trial data can make or break a company's trajectory. For Contineum, which went public earlier this year, the disappointing results for PIPE-307 place greater pressure on its other pipeline assets to deliver.
Despite the significant setback, some Wall Street analysts are not abandoning the stock, pointing to the potential of the company's other programs. Analysts at RBC Capital maintained an "Outperform" rating but trimmed their price target on CTNM to $22 from $25, a 12% reduction. Their thesis now pivots to the potential of PIPE-791, a candidate for idiopathic pulmonary fibrosis (IPF), a chronic lung disease.
This sentiment was echoed by Stifel Nicolaus analyst Paul Matteis, who reiterated a "Buy" rating on Friday. He argued that while the MS trial failure was a clear disappointment, the investment case for Contineum was not solely dependent on PIPE-307. The focus now shifts to the IPF program and its potential to address a significant unmet medical need.
PIPE-307 is a novel M1R antagonist designed to promote remyelination, the natural repair of the protective myelin sheath around nerve fibers that is damaged in multiple sclerosis. A successful remyelinating agent would represent a major breakthrough, moving beyond current treatments that primarily focus on suppressing the immune system to slow disease progression. The failure of the VISTA trial to validate this approach is a blow not just to Contineum but to the broader search for regenerative therapies for MS.
Contineum now faces the challenge of rebuilding investor confidence and demonstrating the value of its remaining clinical assets. The company's future will be closely tied to upcoming data from its other programs as it works to recover from this clinical and financial setback.