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Here’s Why Humanigen Is Getting Hammered Today | The Motley Fool

What happened

Humanigen (NASDAQ:HGEN) stock is sinking after the clinical-stage biopharmaceutical company shared devastating news. The FDA has declined Humanigen’s request for emergency use authorization of lenzilumab, sending the biotech stock 52.1% lower as of 11:38 a.m. EDT on Thursday.

So what 

As a pre-commercial company without any revenue yet, Humanigen had a lot riding on the potential authorization of lenzilumab to treat hospitalized COVID-19 patients. Following positive clinical trial results the company presented in May, a green light seemed more than reasonable.

The FDA told Humanigen the clinical benefits presented aren’t enough to outweigh the risks, at least based on available data. The FDA invited Humanigen to submit further data supporting authorization of lenzilumab if it becomes available.

The FDA’s invitation wasn’t any consolation because leaving the door open for new data is standard procedure when the agency isn’t willing to greenlight a new drug with information available at the moment.

Now what

Humanigen isn’t even close to giving up on lenzilumab. The company is going to continue preparing for a U.S. launch while waiting for results from the ongoing ACTIV-5/BET-B trial. This phase 3 study sponsored by the National Institute of Allergy and Infectious Diseases is expected to wrap up at the end of 2021. 

During the phase 3 trial, dubbed LIVE-AIR, patients randomized to receive lenzilumab were 90% more likely to survive without help from a ventilator. It’s hard to see how Humanigen is going to convince the FDA to change its stance on lenzilumab if the reported success of LIVE-AIR wasn’t strong enough to overcome the risks that prevented its authorization.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.



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