Shares of Perspective Therapeutics (NYSE AMERICAN: CATX) fell sharply, dropping over 13% to $11.49, after the latest data from their Phase 1/2a study on a melanoma treatment yielded mixed results. Analysts and investors reacted to the company’s announcement that lower doses of the radiopharmaceutical [212Pb]VMT01 were more effective compared to higher doses, while an unexpected observation of high radiation levels in patients’ kidneys led to new concerns about treatment safety.

Study Details Trigger Sell-Off

The Phase 1/2a study of Perspective Therapeutics’ VMT01, a MC1R-targeted radiopharmaceutical, aimed at determining its efficacy and safety for treating metastatic melanoma. It was presented at the 21st International Congress of the Society for Melanoma Research, showcasing results that brought both promising and concerning revelations. The data demonstrated no dose-limiting toxicities among patients, and while most adverse effects were mild (Grades 1 and 2), reports indicated a progression of the disease for several patients in the second cohort during early treatment cycles.

Three patients were enrolled in Cohort 1, all of whom completed three treatment cycles. One patient experienced a significant response to the treatment, with two more achieving stable disease at nine and eleven months, respectively. However, among Cohort 2, seven patients experienced disease progression, either after the first or second treatment cycle, raising concerns about the overall efficacy of the radiopharmaceutical at higher doses. The company also acknowledged higher-than-expected levels of radiation in patients’ kidneys, which further rattled investor confidence.

The Safety Monitoring Committee (SMC) has now recommended lowering the dose to 1.5 mCi, which is below the current level, for both single-agent therapy and a combination with the immunotherapy drug nivolumab (Opdivo), an anti-PD-1 antibody provided by Bristol Myers Squibb & Co. The lowered dosage is intended to mitigate potential toxicity while preserving the therapy’s effectiveness. Importantly, the combined approach with nivolumab is considered promising, given preclinical data showing that pairing radiopharmaceutical therapy with immune checkpoint inhibitors can enhance efficacy by inducing immunostimulatory effects at lower radiation levels.

CEO Emphasizes Need for Lower Doses

Perspective Therapeutics’ CEO, Thijs Spoor, highlighted that the data presented was both a validation of their proprietary platform and a signal to move forward with further testing at a reduced dosage. Spoor reiterated that the versatility of their alpha-emitter platform gives them the capability to explore more effective combinations with existing therapies, such as immune checkpoint inhibitors. He expressed optimism that refining dosage levels will allow them to effectively treat patients while minimizing risks.

Chief Medical Officer Markus Puhlmann also indicated that the lack of severe adverse events and the absence of Grade 4 or 5 toxicities is a positive sign, enabling the company to confidently proceed with the next phase of research. However, the observation of high radiation levels in patients’ kidneys necessitates a cautious approach moving forward.

Market Reaction Reflects Safety Concerns

The market responded negatively to the new safety data and the observed inefficacy at higher doses, leading to a 13% decline in the company’s share value on Friday. Investors appeared particularly rattled by the mixed results from the study’s second cohort and the implications of the kidney radiation levels. Despite nearly tripling in value since the start of the year, Perspective Therapeutics now faces skepticism about the commercial viability of its radiopharmaceutical treatment, especially in light of these recent findings.

Perspective Therapeutics has maintained that they will provide an update on the study by the end of the calendar year, as they seek to explore new monotherapy and combination therapy options at lower dosage levels. Meanwhile, their collaboration with Bristol Myers Squibb on combining [212Pb]VMT01 with nivolumab remains a key aspect of their strategy moving forward. The upcoming data updates will be critical in restoring investor confidence, especially as the company pushes for progress with its FDA fast-track designated melanoma therapy.

Expert Opinion: What Analysts Are Saying

According to biotechnology analysts, the primary concerns regarding Perspective’s study data involve the unexpected kidney radiation levels and the progression of the disease in Cohort 2. They stress that although dose reduction is a reasonable adjustment, its impact on efficacy will need to be closely monitored. Analysts have described the current state of the study as a “mixed bag” – encouraging for lower-dose efficacy but marred by the concerns raised about safety.

Dr. Zachary Morris, the lead investigator of the study, expressed a cautiously optimistic view, noting that the combination of [212Pb]VMT01 with immune checkpoint inhibitors could potentially extend the benefits of immunotherapy to more melanoma patients, provided the treatment proves to be safe in the next phase.

Outlook: Critical Steps Ahead for Perspective Therapeutics

Looking ahead, Perspective Therapeutics must focus on demonstrating the safety and effectiveness of the lowered dosage in upcoming trials. Investors are keenly awaiting more definitive results, especially regarding the efficacy of the combination therapy involving nivolumab. With the company already benefiting from FDA fast track designation for [212Pb]VMT01, the pressure is on to deliver clear and positive outcomes to mitigate the recent hit to their stock and regain investor trust.

  Bristol Myers Squibb, Markus Puhlmann, Nivolumab, Perspective Therapeutics, Society for Melanoma Research, Thijs Spoor, Zachary Morris