The Food and Drug Administration rejected Humanigen‘s (HGEN) experimental Covid treatment on Thursday, sending HGEN stock into a dive.
Humanigen was hoping to win emergency use authorization to treat newly hospitalized Covid patients with a drug called lenzilumab. In its letter declining to issue the authorization, the FDA said it couldn’t conclude the benefits of lenzilumab outweigh its risks in Covid treatment.
“We remain committed to bringing lenzilumab to patients hospitalized with Covid-19,” Humanigen Chief Executive Cameron Durrant said in a written statement.
In morning trading on the stock market today, HGEN stock collapsed 59.4% near 6.40. Shares closed at 15.73 on Wednesday.
HGEN Stock Dives On Rejection
The FDA invited Humanigen to continue submitting data that supports the use of lenzilumab in Covid patients. Durrant noted Humanigen is enrolling up to 500 patients in another study that could provide enough effectiveness data to support authorization in hospitalized Covid patients.
The news comes amid a new wave of Covid cases, according to Worldometer. Globally, the seven-day moving average of daily new cases hit a fresh high in late August.
The U.S. is leading the world in terms of total cases since the beginning of the pandemic. But as of Thursday morning, the U.S. ranked No. 24 in the world in terms of reporting new Covid cases. Cases are rising sharply in Iran, the Philippines and Russia.
Humanigen says it’s still working to request authorizations in other countries, including the U.K. But HGEN stock hit its lowest point since June 2020.
Follow Allison Gatlin on Twitter at @IBD_AGatlin.
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