OncoMed Pharmaceuticals Inc. (NASDAQ: OMED) saw its shares crumble after the company announced that Bayer Pharma is terminating its option agreement with the company, as well as a missed mid-stage trial. After having a relatively positive year thus far, this is a huge setback for the stock, hitting an all-time low. Apparently, when it rains it pours.

In terms of the licensing termination, Bayer Pharma notified OncoMed that it will not exercise its option to license the first-in-class Wnt pathway inhibitors vantictumab (anti-Fzd, OMP-18R5) and ipafricept (Fzd8-Fc, OMP-54F28). Effective June 2017, OncoMed will retain worldwide development and commercialization rights to vantictumab, ipafricept and all other Wnt pathway biologics under the collaboration. The small molecule program under the companies’ collaboration continues without change.

Paul J. Hastings, board chair and chief executive of OncoMed, commented on the Bayer situation:

Under our collaboration with Bayer, we have received over $90 million in upfront and milestone payments that have fully funded the development of vantictumab and ipafricept.  While we had looked forward to collaborating with the Bayer team on the late-stage development of these biotherapeutics, we are very pleased to have worldwide rights to two promising Phase 2-ready assets. We will be conducting an internal portfolio review and prioritization as we determine next steps for all our programs, including vantictumab and ipafricept.

As for the mid-stage trial, the company reported top-line results from its Phase 2 Yosemite clinical trial of demcizumab in combination with Abraxane plus gemcitabine in previously untreated patients with metastatic pancreatic cancer. Unfortunately, the trial did not meet the primary endpoint of progression-free survival.  Additionally, the interim median overall survival analysis did not show a benefit for demcizumab in combination with Abraxane plus gemcitabine compared to the Abraxane, gemcitabine plus placebo arm in patients with first-line metastatic pancreatic cancer.

Hastings also commented on the mid-stage trial miss:

Patients in all three arms of the Phase 2 YOSEMITE trial surpassed the published median overall survival rates for Abraxane plus gemcitabine in first-line metastatic pancreatic patients.  While the interim median overall survival was 13.2 months in the pooled demcizumab arms, the interim median overall survival of Abraxane plus gemcitabine was not reached at the time of these analyses.  Based on the lack of benefit over standard-of-care, which performed remarkably well, we will be discontinuing this trial. We will conduct additional analyses, together with our partner, Celgene, to understand these outcomes.  We will also discontinue any additional enrollment in our other ongoing demcizumab trials and conduct analyses of the data from those trials as planned. OncoMed remains focused on completing and analyzing the results of the two randomized Phase 2 clinical trials, PINNACLE and DENALI, that are anticipated in the first half of this year and in continuing the advancement of our portfolio of biotherapeutic candidates.

Shares of OncoMed traded down 37.7% Monday morning to $5.46, with a consensus analyst price target of $17.38 and a previous 52-week trading range of $7.41 to $15.49.

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