Exelixis Inc. plunged the most in almost 2 1/2 years after the biotechnology company said trials of its prostate cancer drug wouldn’t end early.
Analysts anticipated the study might be stopped in advance based on the beneficial effects of the drug, cabozantinib. Shares of South San Francisco, California-based Exelixis dropped 39 percent to close at $3.90 in New York, the biggest loss since Nov. 1, 2011.
“We’ve been really clear with investors that we hope to have positive results from the study, whether they come at the interim or final analysis,” Michael Morrissey, Exelixis chief executive officer, said today in a telephone interview. “We’re focused on getting the trial done and moving it forward.”
Exelixis gained approval in November 2012 from the U.S. Food and Drug Administration for cabozantinib as a treatment for thyroid cancer patients. The company has targeted the drug against prostate cancer, the second-most common type of cancer found in American men, according to the American Cancer Society.
“We see this as a disappointing outcome given that many other high-profile prostate cancer Phase 3 trials have been stopped early,” Cory Kasimov, a New York-based analyst for JPMorgan Chase & Co., said today in a note to clients.