It's never a good day when drugs don't appear to work, and that was the case Thursday for an experimental combination of AstraZeneca medicines designed to treat lung cancer.
AstraZeneca shares fell 15 percent after the British drugmaker said its highly anticipated clinical trial, called MYSTIC, failed to show its two-drug combination extended progression-free survival, a measure of how long patients live without their cancer growing, compared with standard-of-care chemotherapy.
In London trading, it was the stock's biggest drop ever.
The combination was seen as AstraZeneca's ticket to catch up to leaders in immunotherapy, a new way of treating cancer that unleashes the power of the body's own immune system. The British drug giant had been seen as behind in a race dominated by Bristol-Myers and Merck, with Roche, Pfizer and others on their tails.
The results Thursday don't bode well for AstraZeneca's approach, and they affected other stocks as well.
Shares of Bristol-Myers Squibb dropped, as investors interpreted this combination's lack of success to have implications for a similar combination being tested by Bristol.
Merck stock jumped; its immunotherapy drug Keytruda is already approved in advanced lung cancer, and analysts said these results are likely to solidify its position.
AstraZeneca's result "significantly strengthens Merck's lead in the important first-line non-small cell lung cancer market, and increases uncertainty with Bristol's Opdivo + Yervoy," BMO Capital Markets Alex Arfaei wrote in a research note this morning.
Jefferies analyst Jeffrey Holford said the AstraZeneca trial shouldn't have read-through to Bristol-Myers' study, but that investors would likely draw those conclusions anyway. He said the focus for AstraZeneca now may turn to its dividend, "as well as its potential as a consolidation target, once the MYSTIC fail is priced in."
The trial isn't over yet; the company is assessing another measure of the drugs' efficacy: overall survival. Results on whether the combination actually extends people's lives are expected in the first half of 2018.