Shares of biotech company Clovis Oncology got decimated on Monday.
Its stock fell by as much as 72% after it said that the US Food and Drug Administration, or FDA, asked for more clinical data on its lung-cancer treatment rociletinib. Tests showed that a lower number of patients were responsive to the drug than previously submitted to the FDA for approval.
In a statement, the company said it would provide the requested information by the close of business on Monday.
The plunge in shares to as low as $26.05 from around $99 on Friday erased nearly $3 billion of the company’s value.
Earlier this month, Stifel analysts raised their target price to $140 from around $99.22, writing in a note that everything was moving in a positive direction for Clovis.
They were confident that rociletinib would launch in the first quarter of 2016.
But today’s news means that this may be in jeopardy.
It’s also troubling news for investors because AstraZeneca has developed a rival drug called Tagrisso, and the FDA approved it last week.
In biotech, big stock plunges like this happen because one breakthrough drug, like rociletinib, could carry the potential to make or break a company’s fortunes and future.
Here’s the awful price chart:
As reported by Business Insider