Neumora Therapeutics stock collapsed Thursday after its experimental depression treatment failed in the first of three studies planned by the biotech company.
In the study called Koastal-1, Neumora's navacaprant showed no difference from a placebo in treating depression symptoms on a scale called the Montgomery-Asberg Depression Rating Scale, or MADRS. The drug also had a very minimal impact on treating anhedonia, the inability to feel joy, as measured by the Snaith-Hamilton Pleasure Scale, or SHAPS.
The results were "very surprising given the prior data from them and JNJ and reflects a worse-case scenario for the program," RBC Capital Markets analyst Brian Abrahams said in a report. "That said, we believe this is a strong (management) team committed to a diverse and deep neuropsych portfolio that could bounce back from this failure over time."
Still, Neumora Therapeutics stock crashed 81.4% to 1.97. Shares opened at their lowest-ever point after hitting the public markets in late 2023. Shares of Johnson & Johnson, Neumora's rival in the space, also fell a fraction.
Stronger Placebo Responses
The results were particularly surprising given a previous study showed promise for navacaprant on another scale called the Hamilton Depression Rating Scale, or HAM-D. But Abrahams said placebo responses were higher in the Koastal-1 study than previous testing.
"Though, given the great lengths the company had undergone to keep the placebo effects low, we are inclined to believe the outcome of the study reflects the drug's effect (or lack thereof) rather than any particular conduct issues," he said.
However, it appears navacaprant had an impact on women. Some literature suggests the drug's mechanism — blocking the kappa opioid receptor, or KOR — could affect female patients differently.
"But given that male participants actually did worse on navacaprant, we see this as more of a curiosity rather than anything that would necessarily inspire confidence (that) this could enable a future path forward for the drug," Abrahams added.
He currently has an outperform rating and 29 price target on Neumora Therapeutics shares.
Follow Allison Gatlin on X/Twitter at @IBD_AGatlin.
