NewAmsterdam Pharma said Monday its experimental drug lowered "bad" LDL cholesterol by almost 42% over a year, but the results were slightly below expectations. The biotech stock dropped sharply in premarket trades.
The company studied its drug in patients with high LDL cholesterol due to a genetic condition called heterozygous familial hypercholesterolemia. The patients were all on maximally tolerated treatments for their high cholesterol before receiving NewAmsterdam's obicetrapib.
After 12 weeks, obicetrapib recipients had a 36.3% LDL cholesterol reduction compared with the placebo group. At the year mark, LDL cholesterol was 41.5% lower. The results fell short of analysts' expectations. The study outcome met NewAmsterdam's goal, but narrowly missed earlier testing in which obicetrapib lowered LDL cholesterol by 43% to 51%.
William Blair analyst Matt Phipps expected obicetrapib, in this study called Brooklyn, to reduce LDL cholesterol at the higher end of that previous range.
"We do believe approaching or exceeding a 50% LDL reduction can drive upside to current share prices," he said.
On the stock market today, NewAmsterdam stock plunged more than 20% to 14.15 in premarket trades. The shares had been trading in line with its 50-day moving average, according to MarketSurge.
Biotech Stock: Lofty Expectations
Obicetrapib uses a unique mechanism to lower LDL cholesterol. It blocks a key plasma protein called CETP to increase "good" HDL cholesterol and reduce LDL levels. But there have been failures in this drug class, historically, so "many investors continue to have questions" about the class, Phipps said.
There's good reason to have believed the Brooklyn study could lead to higher levels of LDL reduction. More than half of the patients enrolled in NewAmsterdam's study were already receiving a drug called ezetimibe. Ezetimibe and obicetrapib tend to work well together. In earlier testing, the combination lowered LDL cholesterol by about 60%, Phipps said.
Phipps has an outperform rating on biotech stock NewAmsterdam.
Other Studies Ongoing
Other studies are ongoing and could also pique biotech stock investors' interest.
NewAmsterdam is testing the obicetrapib and ezetimibe combo in patients with atherosclerotic cardiovascular disease, or ASCVD, and high cholesterol. ASCVD occurs when plaque builds up in artery walls. The results of that study, called Tandem, are due in the first quarter.
Before that, biotech stock analysts are closely watching NewAmsterdam's Broadway study. This test is examining obicetrapib alone in patients with ASCVD and high cholesterol. Those results are due in the fourth quarter.
Finally, the Prevail study will determine whether obicetrapib can lower the risk of poor cardiovascular outcomes, including heart attacks and strokes, in patients with ASCVD and high LDL cholesterol. The company expects those results in 2026.
NewAmsterdam stock has a promising IBD Digital Relative Strength Rating of 93. That puts the biotech stock in the top 7% of all stocks when it comes to 12-month performance.
Follow Allison Gatlin on X, the platform formerly known as Twitter, at @IBD_AGatlin.
