Regeneron Pharmaceuticals Inc (NASDAQ:REGN), the US biotech group, fell premarket trading on Monday after its most closely watched clinical trial of the year delivered a statistical miss that has prompted a wave of analyst downgrades.
The company disclosed on Friday that its phase 3 trial of fianlimab, combined with its approved immunotherapy cemiplimab, as a first-line treatment for advanced melanoma did not reach statistical significance on its primary goal of improving progression-free survival compared with Merck's established cancer drug Keytruda.
Progression-free survival measures how long patients live without their cancer worsening, and is a standard benchmark for regulatory approval in oncology.
The result was particularly frustrating because the combination did show a numerical improvement, extending median progression-free survival by 5.1 months compared with Keytruda alone, from 6.4 months to 11.5 months.
However, the result fell just short of the statistical threshold, with a p-value of 0.0627, meaning it could not be ruled out that the difference was down to chance.
Citi downgraded Regeneron to neutral from buy and cut its price target from $900 to $700, while BMO reduced its target by nearly 20%, describing the readout as the defining catalyst of the first half of 2026.
The failure compounds a difficult stretch for fianlimab's development, after Regeneron disclosed in its first quarter results that phase 2 data for the drug in non-small cell lung cancer did not support advancement to a late-stage trial, narrowing the addressable market for the programme.
A separate phase 3 trial comparing fianlimab against Bristol-Myers Squibb's rival LAG-3 combination Opdualag continues, though analysts have cautioned that the melanoma miss significantly raises the bar for that study to salvage the programme's commercial prospects.
++++Fianlimab belongs to a new class of drugs known as LAG-3 inhibitors, which target a protein on the surface of immune cells that acts as a brake on the body's ability to attack tumours. By blocking LAG-3 alongside a second immune checkpoint called PD-1, which drugs like Keytruda and cemiplimab already target, the hope is to release two brakes simultaneously and mount a stronger immune response against cancer cells.