Inhibrx’s Cancer Drug Nearly Doubled Response Rate, So Why Did the Stock Fall?

Inhibrx Biosciences, Inc. (NASDAQ:INBX) delivered the kind of clinical update that would normally be expected to get investors’ attention. Its experimental cancer drug INBRX-106, combined with Merck’s Keytruda, produced a confirmed response rate nearly twice that of Keytruda alone in a Phase 2 head and neck cancer study. The results were even stronger among a small group of HPV-positive patients, and Inhibrx is now expanding that part of the study as it considers a potential accelerated regulatory pathway.

READ ALSO: Ionis Has Its First Neurology Launch, But Can Zanvastro Justify Its $285,000 Price?

The market’s reaction, however, went the other way. Inhibrx shares fell 8.8% to $110.45 following the results, according to Reuters.

Bull Case

The headline number from the Phase 2 portion of Inhibrx’s HexAgon study was a 48.3% confirmed objective response rate for INBRX-106 plus Keytruda, compared with 26.5% for Keytruda alone. The study enrolled 68 patients with treatment-naïve, PD-L1-positive metastatic or unresectable recurrent head and neck squamous cell carcinoma, with 63 patients evaluable for the primary endpoint. There was another notable difference between the two groups. Four patients, or 13.8%, receiving the combination achieved a complete response, compared with none receiving Keytruda alone.

Progression-free survival data were also reported, although Inhibrx said those results continue to mature. As of the August 19 data cutoff, median progression-free survival was 9.6 months for the combination compared with 4.9 months for Keytruda alone. At six months, 72.4% of patients receiving the combination remained progression-free versus 42.8% on Keytruda alone.

The HPV-positive subgroup produced some of the most striking numbers, although the patient population was small. Among 10 evaluable HPV-positive patients receiving INBRX-106 plus Keytruda, the confirmed response rate was 80%, compared with 33.3% among nine patients receiving Keytruda alone. Complete response rates were 30% and 0%, respectively.

DON’T MISS: Could Remibrutinib Become the Next $9 Billion Drug for Novartis?

That subgroup has now become an important part of Inhibrx’s development plans. The company intends to add approximately 50 HPV-positive oropharyngeal cancer patients to the Phase 2 study to support a potential accelerated regulatory pathway. Inhibrx estimates that the U.S. could have approximately 30,000 HPV-positive head and neck cancer patients by 2029, including around 6,000 first-line recurrent patients, which it estimates could represent a $1 billion annual sales opportunity.

Bear Case

The biggest reason for caution is also visible in the strongest part of the data. The 80% response rate in HPV-positive disease came from just 10 evaluable patients receiving the combination, compared with nine in the Keytruda-only group. Inhibrx is adding roughly 50 HPV-positive patients to the study, meaning investors will get a larger dataset on this subgroup.

The potential $1 billion annual opportunity should also be treated as what it is: an estimate from Inhibrx and not current revenue from INBRX-106. The company still plans to discuss its proposed accelerated regulatory framework with the FDA following the Phase 2 expansion.

Even the stock’s 8.8% decline does not provide evidence that the clinical results disappointed investors. CEO Mark Lappe told Reuters that the company could not explain the movement and described the data as “very de-risking” for the program. Stifel analyst Dara Azar was also positive on the results, highlighting that Inhibrx had generated what he considered competitive results against the difficult OX40 target.

Conclusion

There is a lot for Inhibrx investors to unpack here, but the next step is fairly clear. INBRX-106 nearly doubled the confirmed response rate seen with Keytruda alone in the overall evaluable population, while the HPV-positive subgroup produced an even larger difference. Now Inhibrx needs more patients to show how well that HPV-positive result holds up.

That makes the planned 50-patient expansion particularly important. It could give investors a better read on the subgroup that produced the strongest response and will feed into Inhibrx’s discussions with the FDA over a potential accelerated pathway. The stock may have fallen after the announcement, but the clinical program itself has moved forward, and for investors following INBX, the expanded HPV-positive dataset is now the piece worth watching.

READ NEXT: Can Eli Lilly Catch Novo Nordisk in the Oral GLP-1 Race? AND Abbott vs. Intuitive Surgical: Is Consistent Growth Better Than Premium Growth? 

This article is originally published at Insider Monkey.