Mirati Therapeutics, Inc. (NASDAQ: MRTX) recently issued a clinical trial update that triggered a massive selloff in its stock. But one wonders whether the selloff may have created a low-cost way to get into Mirati.
The company is developing a cancer drug called glesatinib, which targets the non-small cell lung cancer treatment market. It recently shared Phase 1b trial of the drug and the results mostly bordered on the negative. In short, the Phase 1b results contained update that made some investors wary of the development pathway of glesatinib.
The study results
According to Mirati Therapeutics, Inc. (NASDAQ: MRTX), glesatinib curbed tumor progression in the vast majority of the patients who received the treatment during the Phase 1b study. The company said 10 out of the 11 patients taking glesatinib registered a remarkable regression in their tumor. The results made the management to believe that they have a viable treatment for lung cancer sufferers in the making.
However, the outcome of the Phase 1b study of glesatinib was tainted by safety issues regarding the compound. The study of glesatinib was marred by adverse tolerability issues that led to the study being interrupted in nine patients.
It was the adverse side effects of glesatinib treatment that led Mirati investors to the exit door. But the management of the company does not believe there is a serious case for alarm.
Is there hope for Mirati Therapeutics, Inc. (NASDAQ: MRTX) shareholders?
According to Mirati Therapeutics, Inc. (NASDAQ: MRTX)’s management, the tolerability issues experienced with glesatinib in Phase 1 could be addressed by a new formulation of the drug’s dosage. The problem is that not everyone among the investors has a similar faith. As such, for some a time has come to stay on the sidelines while for others the recent selloff has created an opportunity to grab a share of Mirati at a discount.
Fueling the panic regarding the future of Mirati Therapeutics, Inc. (NASDAQ: MRTX)’s glesatinib are analysts who have jumped to downgrade the stock. Analysts at Leerink Partners recently downgraded the stock to Market Perform and trimmed their price estimate on it to $20 from $37.