Edge Therapeutics Inc. (NASDAQ: EDGE) saw its shares plunge sharply following the results from a late-stage trial. Specifically, the firm announced results from its Phase 3 Newton 2 Study of EG-1962 for adults with aneurysmal subarachnoid hemorrhage.
It’s worth pointing out that there has been big insider selling for this stock ahead of this major drop. Prior to Wednesday’s open, this company had a market cap close to $500 million, and now that it will be less than $50 million.
Overall, the data demonstrated a low probability of achieving a statistically significant difference compared to the standard of care in the study’s primary endpoint. Ultimately, the firm decided to discontinue this study.
The independent Data Monitoring Committee recommended that the study be stopped based on its conclusion that the study has a low probability of meeting its primary endpoint.
And based on the committee recommendation, Edge has decided to discontinue the Newton 2 study and has taken steps to notify health authorities and clinical investigators participating in it. Edge will perform analyses of the cumulative unblinded data from the Newton 2 study to better understand the basis for this outcome.
Brian A. Leuthner, Edge’s president and chief executive officer, commented:
We are very disappointed that the NEWTON 2 study did not demonstrate evidence of improved outcomes with EG-1962, given the positive findings demonstrated on this measure in our randomized, open-label Phase 1/2 NEWTON study of EG-1962 in a similar patient population.
Dr. R. Loch Macdonald, Edge’s chief scientific 0fficer, added:
We are grateful for the support and commitment from the participating patients, their families, study investigators and their teams, and the [aneurysmal subarachnoid hemorrhage] community.
Shares of Edge traded down more than 90% to $1.52 Wednesday morning. The consensus analyst price target was $17.00. and the prior 52-week trading range was $7.89 to $17.77.