Tectonic shares tumble after rival drug trial termination

Published 28/01/2025, 20:54
© Reuters.

Investing.com -- Shares of Tectonic plummeted 41% Tuesday following news that a similar drug developed by Eli Lilly (NYSE:LLY) for chronic kidney disease was terminated due to a lack of foreseeable clinical benefit. The market’s reaction reflects concerns over the future of TECX’s lead product candidate, TX45, which targets the same RXFP1 receptor as Lilly’s volenrelaxin.

The termination of Lilly’s volenrelaxin trial, which also showed no benefit in a related heart failure study, has raised doubts about the efficacy of TECX’s TX45 in treating certain heart failure patients. Investors are eagerly awaiting early-stage results from TX45, expected within the current quarter, for clearer indications of the drug’s potential.

Leerink, which maintains an ’outperform’ rating at $69 price target on TECX, expressed in a client note that the discontinuation of Lilly’s trial has "caused significant concern about the likelihood of success of TX45." This sentiment appears to be shared by the broader market, as evidenced by the sharp decline in Tectonic’s stock price.

"LLY (OP) terminated its volenrelaxin CKD (which it had just initiated in 4Q24) due to failure of a “related heart failure study,” which has caused significant concern about the likelihood of success of TX45 in PH-HFpEF. Recall that both volenrelaxin and TX45 are long-acting relaxin mechanism candidates for cardiopulmonary diseases," Leerink analyst David Risinger commented.

The pharmaceutical industry is known for its high-risk and high-reward nature, with clinical trial outcomes being a significant driver of stock performance. The news of volenrelaxin’s trial termination serves as a reminder of the challenges faced by companies like Tectonic in bringing new therapies to market. Investors will be closely monitoring TECX’s next steps as they seek to understand the implications of recent developments on the company’s drug pipeline and overall market position.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers
© 2007-2025 - Fusion Media Limited. All Rights Reserved.