Stock Market Today, April 28: Erasca Plunges After Patient Death in Early Cancer Drug Trial
Erasca (NASDAQ:ERAS), a developer of therapies for RAS/MAPK pathway-driven cancers, closed at $9.90, down 48% on Tuesday. Shares fell after the company disclosed a patient death from pneumonitis in its ERAS-0015 trial. Investors are watching for clearer safety data. Trading volume reached 51 million shares, about 709% above its three-month average of 6.3 million shares. Erasca IPO'd in 2021 and has fallen 43% since going public.
How the markets moved today
The S&P 500 slipped 0.48% to 7,139, while the Nasdaq Composite lost 0.90% to finish at 24,664. Among biotechnology stocks, peer Revolution Medicines closed at $144.83, up 10%, as investors weighed divergent trial headlines across cancer-drug developers.
What this means for investors
Erasca disclosed a potentially treatment-related death in its Phase 1 ERAS-0015 trial, and its stock plummeted 48% on the unfortunate news. However, while initial reports label the passing “treatment-related,” many analysts and Erasca’s management are pushing back on this notion. One J.P. Morgan analyst explained it was “more of a one-off case versus a clear drug-related concern,” citing that the patient had a prior lung procedure, potentially making them more vulnerable.
However, while ERAS-0015 is delivering outcomes above its benchmarks in both lung and pancreatic cancer patients, the market will have to wait for the trial’s full results to determine whether pneumonitis becomes a common issue. Even after today’s decline, ERAS stock has risen sevenfold over the last year, so today’s bad news may be more of a precaution after this run-up in price than anything.
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Josh Kohn-Lindquist has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
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