What happened
Shares of the off-the-shelf cell therapy company Allogene Therapeutics (ALLO -0.13%) are ending the week on a sour note. The biotech's stock is down by a jaw-dropping 44% as of 11:36 a.m. EDT Friday morning.
Allogene's shares are plunging today after the U.S. Food and Drug Administration placed a hold on the company's AlloCAR T clinical trials. The hold stems from a single chromosomal abnormality in a patient treated with the anti-CD19 CAR-T candidate known as ALLO-501A. The patient in question has stage IV follicular lymphoma and was refractory to two prior lines of immune-chemotherapy and additional radiation therapy, according to the company.
Image source: Getty Images.
So what
Allogene reportedly notified the FDA of the potential safety signal after a bone marrow biopsy, performed to assess low blood counts in the patient, revealed the chromosomal abnormality. The company's management said that an investigation is already underway to evaluate the clinical relevance of this safety signal, any evidence for clonal expansion, and any possible link to gene editing.
What does this all mean? Although Allogene might get super lucky (i.e., the review wraps up within a matter of weeks), shareholders may still want to brace themselves for a potentially lengthy delay. Unraveling the exact cause of this chromosomal abnormality could take months. Viewed in this light, the sharp drop-off in Allogene's shares today is probably warranted.
Now what
Should bargain hunters take advantage of this sizable pullback? The good news is that the company has dosed over a hundred patients with its brand of cellular therapies. So this isn't a brand-new experimental therapy that's off to a bad start. The FDA's clinical hold, in turn, probably won't last forever. Thus, this beaten-down biotech stock may indeed be worth buying on this dramatic sell-off.
