Is This the Beginning of the End of Aduro BioTech?

Aduro BioTech Inc. (NASDAQ: ADRO) watched its shares tumble on Monday morning following negative results in its mid-stage ECLIPSE trial. The company announced that the Phase 2b ECLIPSE trial did not meet the primary endpoint of an improvement in overall survival for patients with pancreatic cancer who had failed at least two prior therapies in the metastatic setting.

The primary endpoint of this trial was overall survival, while secondary endpoints included evaluation of clinical and immune response and safety. The median overall survival in this third-line and greater setting was 3.8 months for patients treated with the immunotherapy regimen of CRS-207 and GVAX Pancreas, 5.4 months for patients treated with CRS-207 alone and 4.6 months for patients administered chemotherapy.

Separately, there were no unexpected safety findings with the combination of CRS-207 and GVAX Pancreas or CRS-207 alone, and the immunotherapies were generally well tolerated.

Keep in mind that full study findings will be presented at a future scientific congress.

Stephen T. Isaacs, chairman, president and CEO of Aduro, commented:

This is an unexpected outcome, and we are disappointed particularly for the pancreatic cancer patients who are in need of additional treatment options. We would like to thank the patients and their families, investigators and staff involved in this Phase 2b trial for their support and participation in this study. While we are well aware of the very difficult-to-treat nature of late-stage metastatic pancreatic cancer, we are surprised by the divergence of these data from the results of our Phase 2a study. At the same time, we continue to look forward to the interim results later this year from our ongoing STELLAR trial, which is evaluating CRS-207 and GVAX Pancreas with and without the anti-PD1 checkpoint inhibitor nivolumab as a second-line therapy for patients with metastatic pancreatic cancer. We believe the scientific rationale for combining CRS-207 with a checkpoint inhibitor is compelling. Additionally, as a company, we are very well-positioned with a strong cash position and three differentiated, potentially synergistic immunotherapy platforms comprising our LADD, STING pathway activator and B-select monoclonal antibody programs.

So far in 2016, Aduro has underperformed the broad markets and the stock is down over 60% (prior to Monday’s move).

Shares of Aduro traded down 25% at $8.00 shortly after Monday’s opening bell. The consensus analyst price target is $33.25 and the new 52-week trading range is $7.26 to $37.49.