Juno Therapeutics shares shed 24 percent Wednesday after the biopharmaceutical company voluntarily placed a mid-stage clinical trial on hold after two patients suffered cerebral edema earlier this week.
Both patients died, which brings the study's death toll to five.
JCAR015 is intended to be used to treat patients with relapsed or refractory acute lymphoblastic leukemia. Patients who have a relapse of this cancer often have few or no other options.
"Of the 12 patients treated following protocol update, without fludarabine, 10 patients had high disease burden," said Peter Lawson, a SunTrust Robinson Humphrey analyst, in a research note. "One of the recent patients with cerebral edema had high disease burden, the other patient did not, indicating disease burden might not be contributing to the higher proliferation of JCAR015 and subsequent neurotoxicity."
The JCAR015 drug was designed to fight cancer by using patients' own immune systems against the disease. However, the drug prototype has been plagued by issues in testing. Three additional patients died in July from side effects while enrolled in studies of the same drug.
"There is hope," Citi analyst Robyn Karnauskas told CNBC's "Power Lunch." "This company has a lifesaving drug with high cure rates and is treating patients with a short life span."
"This is just a short setback," Karnauskas added. "The company is trying to figure out how to develop this drug in the safest way possible."
Juno has contacted the Food and Drug Administration and is collaborating with the Data and Safety Monitoring Board to determine how to move forward. If the FDA gives Juno approval to resume the trials, the company can either modify the study, start a new one or terminate the program, Karnauskas said.
"We're going to have to wait for a week or two at least to figure out what the real option or the real path forward for this company is," Karnauskas said. "We think most likely they'll develop this drug and even if they don't, they have other drugs in their pipeline."
—Reuters contributed to this report