Investing.com -- Shares of Third Harmonic (NASDAQ:HLIT) Bio, Inc. (NASDAQ:THRD) plummeted 35% following the announcement of Phase 1 clinical trial results for its drug candidate THB335 and a strategic corporate update. The company reported on the safety, pharmacokinetics, and pharmacodynamics of THB335 from its recently completed trial, which is expected to support its advancement into a Phase 2 trial for chronic spontaneous urticaria (CSU).
Despite the clinical progress, the company’s strategic review process to maximize shareholder value, which includes evaluating a range of strategic transactions and business combinations, raised concerns among investors. This strategic shift coincides with the company’s decision to halt all non-THB335 related research and discovery activities and reduce its workforce by approximately 50%.
The Phase 1 trial demonstrated dose-dependent increases in exposure and reductions in serum tryptase, a biomarker of mast cell activation, with the higher doses showing potential clinical benefit for CSU treatment. However, safety observations included isolated transaminase elevations and adverse events consistent with KIT biology, such as hair color changes and reductions in hemoglobin and neutrophil counts, though these were largely dose-dependent and resolved after the trial.
Natalie Holles, CEO of Third Harmonic Bio , expressed confidence in the drug’s development path, stating, "From a drug development perspective, we expect the results of the Phase 1 study will provide a basis for the advancement of THB335 into a Phase 2 study in CSU." Holles further emphasized the company’s intent to capitalize on opportunities to accelerate value creation, backed by a strong balance sheet and a disciplined operating strategy.
The full results of the Phase 1 trial will be presented at the AAAAI/WAO Joint Congress on Sunday, March 2, 2025. Meanwhile, Third Harmonic Bio plans to proceed with THB335 development activities through the first half of 2025 to prepare for a Phase 2 study initiation by mid-year.
The company’s financial position remains robust, with approximately $285 million in cash and cash equivalents as of December 31, 2024. After considering the projected expenses related to THB335 Phase 2 readiness, ongoing operations, and restructuring costs, Third Harmonic Bio estimates its cash balance will be between $262 million and $267 million by June 30, 2025. Investors are closely monitoring the company’s next steps and strategic decisions as it navigates the challenges ahead.
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