Zymeworks Inc. (NASDAQ: ZYME) experienced a surprising 9.29% plunge in after-hours trading on Monday, despite announcing positive topline results from its Phase 3 HERIZON-GEA-01 trial for its cancer drug Ziihera. The significant drop comes as a shock to many investors, given the seemingly good news about the company's lead product candidate.
The Phase 3 trial evaluated Ziihera (zanidatamab-hrii) in combination with chemotherapy, with or without BeOne's Tevimbra (tislelizumab), as a first-line treatment for HER2-positive locally advanced or metastatic gastroesophageal adenocarcinoma. Both treatment arms demonstrated highly statistically significant and clinically meaningful improvements in progression-free survival compared to the control arm. Additionally, the combination of Ziihera, Tevimbra, and chemotherapy showed clinically meaningful and statistically significant improvements in overall survival.
The sharp decline in Zymeworks' stock price, despite the positive trial results, suggests that investors may be engaging in a "sell the news" event or that other factors are influencing the stock's performance. It's possible that the market had already priced in expectations of positive results, leading to profit-taking. Alternatively, investors might be concerned about potential challenges in the commercialization process or competitive landscape. As the trading session progresses, it will be interesting to see if the stock price recovers as the market digests the full implications of the trial results and Zymeworks' future prospects in the oncology space.
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