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Liminal (LMNL) Ends Development of Lead Candidate, Stock Down

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Shares of Liminal BioSciences (LMNL - Free Report) were down 13.8% in the after-market trading session on Jul 21, after management announced its decision to discontinue the development of its lead pipeline candidate, fezagepras, which was being developed as a potential nitrogen scavenging drug.

This decision was based on data from a phase Ia single ascending dose (SAD) clinical study initiated in May 2022 that compared fezagepras to Sodium Phenylbutyrate in healthy volunteers, as a potential nitrogen scavenger. Sodium Phenylbutyrate is marketed under the trade name Buphenyl by Ucyclyd Pharma and has been approved by the FDA for treating urea cycle disorders (UCD).

Although there were no safety concerns reported in the study participants administered fezagepras, data from the SAD study showed that fezagepras was significantly inferior when compared to Sodium Phenylbutyrate as a nitrogen scavenger.

A nitrogen scavenger drug, also called ammonia scavenger drug, helps to remove ammonia from the bloodstream and has been effective in treating UCD.

In the year so far, shares of Liminal have plunged 46.8% compared with the industry’s 20.4% decline.

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Following the discontinuation of the development of fezagepras, Liminal BioSciences does not have any pipeline candidate in clinical development.

Management expects the decision to help the company in utilizing its resources toward its pre-clinical development programs. Presently, Liminal BioSciences is developing GPR84 antagonists and OXER1 antagonists, which are in pre-clinical development and are being developed to treat inflammatory, metabolic and fibrotic conditions. Liminal BioSciences is also looking for opportunities to expand its pipeline beyond these pre-clinical programs.

Zacks Rank & Stocks to Consider

Liminal BioSciences currently carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the overall healthcare sector include Jazz Pharmaceuticals (JAZZ - Free Report) , Spectrum Pharmaceuticals (SPPI - Free Report) and Merck (MRK - Free Report) . While Jazz Pharmaceuticals and Spectrum Pharmaceuticals each sport a Zacks Rank #1 (Strong Buy) at present, Merck carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Estimates for Jazz Pharmaceuticals’ 2022 earnings have increased from $17.05 to $17.06 in the past 30 days. The earnings estimates for 2023 have increased from $18.05 to $18.15 in the past 30 days. Shares of JAZZ have risen 24.3% in the year-to-date period.

Earnings of Jazz Pharmaceuticals beat estimates in three of the last four quarters and missed the mark on one occasion, the average surprise being 12.8%. In the last reported quarter, JAZZ delivered a negative earnings surprise of 0.5%.

Estimates for Spectrum Pharmaceuticals’ 2022 loss have narrowed from 55 cents to 52 cents in the past 30 days. The loss estimates for 2023 have also narrowed from 10 cents to 7 cents in the past 30 days. Shares of SPPI have fallen 32.3% in the year-to-date period.

Earnings of Spectrum Pharmaceuticals beat estimates in two of the last four quarters and missed the mark on the other two occasions, the average surprise being 5.7%. In the last reported quarter, SPPI delivered an earnings surprise of 50%.

Estimates for Merck’s 2022 earnings have increased from $7.31 to $7.32 in the past 30 days. Shares of MRK have risen 17.6% in the year-to-date period.

Earnings of Merck beat estimates in three of the last four quarters and missed the mark on one occasion, the average surprise being 13.4%. In the last reported quarter, MRK delivered an earnings surprise of 18.2%.