Instil Bio Stock Collapses After Halting New Cancer Drug Program
Shares plummeted nearly 50% after the company's subsidiary ended development of its AXN-2510 asset, marking another major pipeline setback for the biotech firm.
Shares of Instil Bio (NASDAQ: TIL) collapsed in Tuesday trading, plummeting over 46% after the company announced another significant setback in its clinical pipeline, renewing investor concerns over the biotech firm's long-term viability.
The sell-off was triggered by a pre-market announcement that Instil Bio's wholly-owned subsidiary, Axion Bio, was discontinuing the clinical development of its cancer therapy candidate, AXN-2510. According to the company's official press release, it has also terminated its license and collaboration agreement with ImmuneOnco Biopharmaceuticals, from which it had originally licensed the drug.
As a result of the termination, all global development and commercial rights for AXN-2510 will revert to ImmuneOnco. Instil Bio did not provide a specific reason for halting the program, a lack of transparency that has further unsettled investors.
The stock fell to $6.53 by midday, wiping out nearly half of the company's market capitalization. The move extends a disastrous run for the company, with the stock now trading far below its 52-week high of $42.79.
This latest failure is not an isolated incident but part of a troubling pattern of clinical disappointments for Instil Bio. The current crisis echoes the company's decision in late 2022 to halt the development of its former lead drug candidate, ITIL-168, a tumor-infiltrating lymphocyte (TIL) therapy. That move was accompanied by a major corporate restructuring and a 60% reduction in its workforce, as reported by Fierce Biotech at the time.
For a clinical-stage biopharmaceutical firm like Instil Bio, the pipeline is its lifeblood. The repeated failure to advance its key assets raises critical questions about its research and development strategy and its ability to bring a product to market. After pivoting from its original lead candidate, the failure of a subsequent program deals a heavy blow to the company's turnaround narrative.
According to an Investing.com report, the termination of the AXN-2510 program by the subsidiary adds to the uncertainty surrounding the company’s path forward. With a diminished pipeline, Instil Bio's management will face intense pressure to outline a clear and viable strategy to salvage value for shareholders.
Investors are now left to assess the remaining potential of Instil Bio's technology platform, which is centered on genetically engineered cell therapies. However, with two major public setbacks, confidence has been severely eroded, as reflected in the stock's dramatic decline.