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NewLink Genetics Corp (NASDAQ:NLNK) Plunges After Genentech Withdrawl

NewLink Genetics Corp (NASDAQ:NLNK)

NewLink Genetics Corp (NASDAQ:NLNK) stock plunged after the company announced the termination of a licensing agreement with Genentech for its IDO inhibitor, GDC-0919,. However, the termination will not affect research collaboration on the discovery of other IDO/TDO inhibitors between the two firms.

GDC-0919 Disappointing results

Genentech’s decision came as a surprise, given that data on the inhibitor was recently presented at the American Society of Clinical Oncology annual meeting. The two companies had signed the licensing agreement in 2014.

NewLink Genetics Corp (NASDAQ:NLNK) stock shed more than a third of its market value on Genentech ending its collaboration on GDC-0919 development. Disappointing clinical trial results appears to have triggered the surprise move by Genentech. The trial of GDC-0919 in combination with Roche’s –PD-L1 failed to yield the desired results.

Clinical Trial results indicate that the response rate for GDC-0919 stood at 9% in patients with solid tumor cancers. The response rate was quite low to justify further clinical research. Epacadostat, a drug being marketed by Incyte Corporation (NASDAQ:INCY), delivered a response rate of 30-35% when combined with Merck & Co., Inc. (NYSE:MRK) PD-L inhibitor.

Even on the disappointing results CEO, Charles Link, remains optimistic about GDC-0919 prospects.

“We are obviously disappointed in this decision. We remain committed to advancing our IDO pathway inhibitor indoximod, which continues to generate exciting data in combination with anti-PD-1 agents, cancer vaccines, and chemotherapy in multiple cancer types including melanoma, prostate cancer, acute myeloid leukemia, and pancreatic cancer,” said Mr. Link.

Genentech returning rights of GDC-0919 caps another setback on NewLink Genetics Corp (NASDAQ:NLNK)’s push to build out its pipeline of oncology drugs. Early this month the biopharmaceutical company announced that one of its IDO-inhibitors had failed in a mid-stage breast cancer trial. The negative results prevents the company from expanding its usage beyond melanoma treatment.

NewLink Genetics Corp (NASDAQ:NLNK) stock remains under pressure as a wave of negative results on the clinical trial front continues to spook investors. NewLink Genetics Corp (NASDAQ:NLNK) stock was up by 1.30% in Wednesday’s trading session, to end the day at $6.22 a share.

I have no positions in any of the stocks mentioned, and have no plans to initiate any positions within the next 72 hours. All information, including any data, is provided without any guarantees of accuracy.

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About the author: Monica has an undergraduate degree in Accounting and an MBA she earned – with Honors. She has six years of experience in the financial markets and has been an analyst for the past two years.

NewLink Genetics Corporation (NASDAQ:NLNK) Has a Big Day

NewLink Genetics Corporation (NASDAQ:NLNK)

NewLink Genetics Corporation (NASDAQ:NLNK) gained 17.5% today on over five times the average daily volume. NewLink Genetics announced that it will be presenting at the 2017 American Association of Cancer Research annual meeting. Experts claim that when a firm agrees to participate in such an event, there is a high likelihood that they will be presenting positive news on one of their drug or treatment candidates.

NewLink Genetics (NASDAQ:NLNK) is a biopharmaceutical company at the forefront of discovering, developing and commercializing novel immuno-oncology product candidates to improve the lives of cancer patients. NewLink Genetics’ product candidates are designed to harness multiple components of the immune system to combat cancer.

Tuesday, February 28, 2017, NewLink Genetics Corp. (NASDAQ:NLNK) reported Q4 and full year earnings. NewLinks lost $13.5 million in its fourth quarter. The Ames, IA-based company said it had a loss of $0.46/share. The results exceeded Wall Street expectations. The average of analysts estimates of four analysts was reported to be a loss of $0.66/share. NewLink Genetics posted revenue of $12.7 million in the period – beating analyst estimates of $4.3 million. NewLink posted a yearly loss of $85.2 million, or $2.94 per share. Revenue was reported as $35.8 million.

NewLink Genetics Corp. (NASDAQ:NLNK) shares have risen 38.2% this week and 92% YTD. NLNK shares started the year around $10 and have risen in value each month for the past three months but are still over 4% from their 52-week highs. Of the six firms that follow NewLink Genetics Corp. (NASDAQ:NLNK), four rate the shares as a “Strong Buy” and two rate NLNK shares as a “Hold”.

Ticker Symbol NLNK
Last Price a/o 5:08 PM EST  $                    19.73
Average Volume                    281,750
Market Cap (mlns)  $                  578.88
Sales (mlns) $30.70
Shares Outstanding (mlns) 29.34
Share Float (mlns) 21.62
Shortable Yes
Optionable Yes
Inside Ownership 1.50%
Short Float 10.61%
Short Interest Ratio 8.14
Quarterly Return 72.16%
YTD Return 91.93%
Year Return -0.85%

I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 96 hours. All information, or data, is provided with no guarantees of accuracy. 

About the author: Steve Clark is a 23-year Wall St professional with stints in M&A, risk management, and algorithm trading.