Allogene Therapeutics tanks 45% on Friday as FDA halts cancer drug trial

Shares of Allogene Therapeutics Inc (NASDAQ: ALLO) tanked 45% to $13.35 on Friday after the U.S. FDA put a hold on its Cancer drug trial.

The sharp decline wiped millions off Allogene’s market cap, leaving the California-based firm with a valuation of $1.90 billion.  

Stifel downgrades the stock to ‘hold’

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Allogene said in a press release this morning that the U.S. drug regulator temporarily halted its clinical trial for allogenic Car T (AlloCAR T) therapy following a report of a chromosomal abnormality in a patient.

“Patient safety is our highest priority, and we are committed to working closely with the FDA to evaluate any potential clinical implications of this finding, and determine next steps for advancing ALLO-501A and our clinical programs.”

RBC Capital still rates ALLO at “outperform” but slashed its price target from $55 to $45. The announcement, however, made Stifel downgrade the stock from “buy” to “hold”.

The U.S. FDA review is ongoing

The study will remain suspended until the U.S. Food and Drug Administration reviews the single patient case. The press release read:

An investigation is underway to further characterise the observed abnormality, including any clinical relevance, evidence of clonal expansion, or potential relationship to gene editing.

The U.S. firm has tested its gene-edited AlloCAR T products on over 100 patients. The ALPHA trials, it believes, confirms ALLO-501A to hold a favourable clinical profile against large B-cell lymphoma.