March 26 (Reuters) – Wave Life Sciences shares plunged over 55% on Thursday after a higher dose of its experimental obesity drug failed to show a clear improvement at reducing a dangerous type of belly fat.
In an early-stage trial, patients who received one injection of Wave’s drug WVE-007, at the lower 240 milligram dose, lost about 0.9% of their body weight on average compared with placebo after six months of follow-up.
Wave said other results were more encouraging, including an about 14% reduction in visceral fat — the dangerous fat that builds up around internal organs — along with a small gain in lean muscle.
But results from a 400 mg dose after three months showed only about a 5% reduction in visceral fat.
“Investors are likely discouraged by the 400 mg data at 3 months, which look similar on visceral fat as 240 mg and not as good on total fat and lean mass, though there appear to be some differences in the baseline BMI and body composition of this cohort that could explain some of these observations,” said a Leerink Partners analyst in a note.
Despite the disappointment, analysts said the stock’s reaction was overdone.
“We would be buyers on any weakness, as the results further support the clean safety profile and once/twice-yearly dosing of WVE-007,” said Oppenheimer analyst Cheng Li.
(Reporting by Kamal Choudhury in Bengaluru; Editing by Sahal Muhammed)
