Incyte Corp. (NASDAQ: INCY) saw its shares make a sharp left turn on Friday after the firm gave an update on its late-stage collaboration with Merck & Co. Inc. (NYSE: MRK). The trial was for a combination of Incyte’s epacadostat, an IDO inhibitor, in combination with Merck’s Keytruda. NewLink Genetics Corp. (NASDAQ: NLNK) also is feeling the sting from this trial as well.

Incyte and Merck announced that an external Data Monitoring Committee (eDMC) review of the pivotal Phase 3 ECHO-301/KEYNOTE-252 study results evaluating Incyte’s epacadostat in combination with Merck’s Keytruda in patients with unresectable or metastatic melanoma determined that the study did not meet the primary endpoint of improving progression-free survival in the overall population compared to Keytruda monotherapy.

The study’s second primary endpoint of overall survival also is not expected to reach statistical significance. Based on these results, and at the recommendation of the eDMC, the study will be stopped.

Separately, NewLink is focused on the research and development of its own IDO therapies, Indoximod and NLG802. With the failure of Incyte’s and Merck’s IDO therapy, it’s giving investors less faith in NewLink’s pipeline.

Steven Stein, M.D., chief medical officer of Incyte, commented:

While we are disappointed that this study did not confirm the efficacy of epacadostat in combination with KEYTRUDA in patients with unresectable or metastatic melanoma, data from ECHO-301/KEYNOTE-252, including analyses of an extensive biomarker panel, will contribute to our understanding of the role of IDO1 inhibition in combination with PD-1 antagonists, and may inform our broader epacadostat clinical development program. We remain dedicated to transforming the treatment of cancer and will continue to explore how IDO1 inhibition and other novel mechanisms can potentially improve outcomes for patients in need.

Shares of Incyte were last seen down over 21% at $65.15, with a consensus analyst price target of $141.59 and a 52-week trading range of $64.52 to $142.45.

Merck traded down 0.5% at $54.24 a share, with a consensus price target of $66.55 and a 52-week range of $53.12 to $66.41.

NewLink shares were last trading down 35% at $4.71, with a consensus price target of $22.50 and a 52-week range of $4.45 to $20.47.

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