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NewLink Shares Plunge After Incyte & Merck's Study Fails

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Shares of NewLink Genetics Corp. (NLNK - Free Report) plunged about 43% after it announced that it conducting a review of studies evaluating its IDO pathway inhibitor, indoximod in combination with anti-PD-1/PD-L1 agents in several cancer indications including melanoma. Shares of the company have also declined 77% over a year compared with the industry’s decline of 11.5%.


NewLink’s decision came in response to the Incyte Corp.’s (INCY - Free Report)  and partner Merck (MRK - Free Report) announcement of the failure of a key melanoma combination study on Friday Incyte and Merck said that a combination of Incyte’s epacadostat and Merck’s Keutruda failed in achieving improved progression free survival over Keytruda alone in phase III study ECHO-301/KEYNOTE-252. The study was evaluating the combination drugs for the treatment unresectable or metastatic melanoma.

An external data monitoring committee recommended the termination of the study following the review of the data from the pivotal study.

Data from the phase III study demonstrated that a combination of IDO1 inhibitor and PD-1 antagonists may not hold potential in treatment of melanoma which obviously raised doubts over the potential success of indoximod combination studies with anti-PD-1/PD-L1 agent.

Newlink will provide an update when the review is complete. Newlinkclaims that indoximod has a differentiated mechanism of action (MOA) and it has demonstrated that it can improve the outcomes for patients with cancer in combination studies.

The results of the ECHO-301 study also affected several companies like Bristol-Myers Squibb’s (BMY - Free Report) which are developing combination immunotherapies for the treatment of cancer.

Zacks Rank

NewLink carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank stocks here.

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