RE:RE:TauRx Phase 3 Trial Results Provided by Dow Jones
By Yi Wei Wong
Shares of Genting Bhd. fell in early trading, with analysts pointing to disappointment over the lack of a breakthrough in an Alzheimer's drug being developed by an affiliate of the Malaysian company.
Genting's shares fell as much as 6.5% to 4.86 ringgit (US$1.11) on Friday, putting the company on pace for its biggest one-day loss this year.
The drop came after TauRx Pharmaceuticals Ltd., a company in which Genting holds a 20% stake, failed to report a hoped-for breakthrough in a trial of its Alzheimer's drug at a global conference in London on Thursday.
Earlier this month, Genting shares gained 10% in a single trading day after TauRx said that patients receiving doses of the drug showed signs of slower cognitive decline compared with their peers, and that it would provide an update during the London conference. On Thursday, however, TauRx said little more than that initial trial results were positive and that it will need another year to research the drug.
"Analysts including myself think that if [the drug trial] results are positive, that could be a major positive catalyst for Genting," RHB Research analyst Jim Lim said. However, "we think that there is a great skepticism and caution on TauRx's results this time around," he said. In 2016, TauRx's Phase 3 clinical trial of an Alzheimer's drug failed to reach its primary endpoint after the company initially said the drug had a marked beneficial effect.
RHB Research has a buy rating and target price of MYR6.37 on Genting's stock.
"My feeling is that maybe investors are surprised that another year of research is required," said Maybank Investment Bank analyst Samuel Yin, who attended TauRx's presentation.
In a separate research note, the analyst said that while it is "early days yet" for the Alzheimer's treatment, "initial results are positive and commercialization efforts are ongoing." Maybank Investment Bank has a buy rating and target price of MYR5.96 on Genting's stock.