Small biotech stocks are often considered “binary” lottery-ticket type events, with either a small chance of big upside, or a much greater probability of nothing at all. These stocks can soar to heights of euphoria and crash to depths of depression. Case in point: Vascular Biogenics Ltd (NASDAQ:VBLT) shares are collapsing this morning, falling over 60%, after the biotechnology company reported phase 3 clinical results that missed the mark.
Specifically, the company reported top-line results from its pivotal Phase 3 GLOBE study in patients with recurrent glioblastoma (rGBM) which was designed to evaluate VB-111 in combination with bevacizumab (Avastin®), compared to the bevacizumab control arm. The study did not meet its pre-specified primary endpoint of overall survival (OS).
Given that this was the company’s most advanced clinical program, it is no surprise to see that shares are tanking on the news.
Dror Harats, M.D., Chief Executive Officer of VBL Therapeutics, said “We are disappointed that our encouraging Phase 2 data were not replicated in the GLOBE Phase 3 study, and once we receive the full and final data we will be analyzing them carefully to better understand the outcome of the study. We are grateful to the trial investigators, site personnel, patients and caregivers who participated in GLOBE. We believe that VB-111 may still hold promise for other indications we currently or may study in the future.”
If we turn to the Street in general, we can see that Vascular stock has received 3 analyst Buy ratings in the past 12 months. These analysts have an average price target on the stock of $16.33. Typically, on big news like this, analysts will revise their price targets and/or ratings of a stock, so stay tuned!