Disappointed investors punished Wave Life Sciences (NASDAQ: WVE), causing its shares to lose roughly half their value on Thursday after the RNA-based drug developer reported mixed early-stage clinical data for its obesity candidate WVE-007, showing a less than 1% reduction in body weight six months after receiving the high dose.
Investors zeroed in on the mere 0.9% dip in body weight and 3.3% decline in waist circumference (both placebo-adjusted) reported in the 32-participant 240 mg dose cohort following a six-month follow-up review during the Phase I INLIGHT trial (NCT06842186), designed to assess WVE-007 in healthy individuals living with overweight or obesity conditions.
The improvement in both measures wasn’t as dramatically different as investors had apparently hoped from the 0.3% weight dip and 0.4% waist reduction seen three months after dosing.
And those measures are far from the benchmark of at least 5% body weight reduction compared to placebo that the FDA wants to see a year after treatment, according to an agency draft guidance issued in January 2025:
“In general, a drug is considered effective for weight reduction and maintenance in patients with obesity or overweight with comorbidities if, after one year of treatment at the maintenance dosage, the difference in mean percentage weight reduction between the investigational drug and control treated groups is at least 5% and the difference is statistically significant,” the FDA advised.
WVE-007 is an inhibin subunit beta E (INHBE) GalNAc-conjugated small interfering RNA (siRNA) therapeutic designed to treat obesity by silencing INHBE messenger RNA (mRNA) and its downstream gene product, Activin E. WVE-007 applies Wave’s oligonucleotide chemistry and Stereopure interfering Nucleic Acid (SpiNA) next-generation siRNA design.
“Wave delivered half of what we were hoping to see for WVE-007,” lamented Steve Seedhouse, PhD, biotechnology equity research analyst with Cantor Fitzgerald, as reported by Reuters.
Added Roger Song, MD, equity analyst with Jefferies: “From here, we see limited value from INHBE/obesity in the stock and will look to Ph2a [Phase IIa] data to re-assess opportunity.”
52-week low
Investors translated that disappointment into an initial selling surge that sent Wave shares plunging 59% to a 52-week low of $5.02 in early Thursday trading at 9:40 a.m., from $12.30 at Wednesday’s close. Shares rallied somewhat during the rest of the day, enough for Wave shares to close at a nearly 50% one-day loss at $6.20.
On Friday, however, enough investors bought the dip for Wave shares to finish the week bouncing back nearly 3%, to $6.36.
The three-month 240 mg data also showed a visceral fat mass drop of -7.8% and total fat mass reduction of -5.1%. Those numbers showed improvement six months after dosing to -14.3% and -5.3%, respectively.
However, at the trial’s high dose of 400 mg, a post-hoc analysis also showed an identical placebo-adjusted reduction in visceral fat mass of -7.8% in participants with >500g of baseline visceral fat. The 400 mg data also showed total fat mass reduction of -0.7%, and a lean mass preservation of -0.2% from baseline, vs. a 2.2% increase at the 240 mg dose.
“Investors are likely discouraged by the 400 mg data at three months, which look similar on visceral fat as 240 mg and not as good on total fat and lean mass,” Joseph P. Schwartz, senior managing director, rare diseases, and a senior research analyst with Leerink Partners, wrote in a research note.
The 400 mg data, he continued, likely reflected the leaner baseline body composition in patients in the 24-participant 400 mg cohort, with lower body mass index (BMI) and the presence of 10 participants out of 24 individuals with healthy levels of visceral fat (≤500 g).
Positive case
Discussing the data with analysts on Wave’s quarterly earnings call, president and CEO Paul Bolno, MD, offered a positive case for WVE-007, saying regulators will likely look more favorably at the candidate because of its potential for infrequent dosing, and especially because of the body mass reductions shown by the INLIGHT trial.
Wave plans to launch a pivotal Phase IIa multidose portion of INLIGHT during the second quarter in people with higher BMI (35–50 kg/m2) and comorbidities. Results from that study will shape further development of WVE-007 in obesity as well as metabolic dysfunction-associated steatohepatitis (MASH), type 2 diabetes, and cardiovascular disease.
“I think we’re set up to be able to distinguish this as delivering on the profile that we believe is going to be requisite for the regulatory interactions for a potential accelerated registrational pathway,” Bolno said.
“This [WVE-007] really is delivering the profile that patients are looking for: Reduction in fat, preservation of muscle, ultimately allowing patients to be leaner, not lighter,” Bolno said. “What we hear time and time again, both from the clinicians, patient advocacy community, and obesity, again, and strategic partners, is scale weight versus body mass.”
Salim Syed, a managing director and senior biotechnology analyst with Mizuho Securities USA, and two colleagues agree with Wave, concluding that the two most important data measures the company could offer for WVE-007 were waist circumference and visceral fat loss.
“Good data,” Syed and colleagues declared. “Time response in visceral fat loss and waist circumference while stabilizing lean mass is particularly encouraging, and continues to showcase WVE-007 as a differentiated mechanism for obesity.”
$7B–$11B sales forecasts
Syed and Mizuho are forecasting about $7 billion in peak-year worldwide unadjusted sales for WVE-007—compared with a more than $11 billion projection made last month by Bank of America (BofA) Securities. Behind those blockbuster projections is the huge potential patient population for WVE-007 of more than one billion people globally, including 175 million Americans.
Mizuho raised its 12-month price target on Wave shares 23%, from $22 to $27, while analysts at two other investment firms chopped their price targets by roughly half:
- Wells Fargo (Ben Burnett, PhD)—Down 52% from $27 to $13, maintaining “Overweight” rating.
- BofA Securities (Alec Stranahan, PhD)—Down 45% from $38 to $21, maintaining “Buy” rating.
Bolno took issue with the conventional notion that scale weight alone equated to a health phenotype. “Actually, what’s driving obesity improvements in health outcomes is driven from fat reduction, lean mass preservation, and ultimately seeing that forward. So I think it’s important that we look at the benchmarking for weight loss to be, can we cross those criteria for approval in obesity? And we do believe that we will use that [accelerated approval] pathway.
“But I think what’s more important than that in terms of, ultimately, the therapeutic potential for INHBE in the obesity landscape is really driving this improvement of an overall body composition, and that’s how you get healthy outcomes,” Bolno added.
Bolno and Wave characterized the overall results from INLIGHT as positive.
“WVE-007 is already translating in the clinic with potent and durable Activin E reductions, and it continues to be safe and well tolerated,” Wave’s chief medical officer, Christopher Wright, MD, PhD, said in a statement. “Even in this early Phase I trial, we are seeing our differentiated chemistry translate into clinically meaningful levels of fat loss, particularly harmful visceral fat, with muscle preservation.”
Cheng Li, PhD, director, biotech equity research with Oppenheimer, agreed with Wave about viewing the results from INLIGHT as being mostly positive.
“We would be buyers on any weakness, as the results further support the clean safety profile and once/twice-yearly dosing of WVE-007,” Li wrote in a research note reported by Reuters.
Leaders and laggards
- Kodiak Sciences (NASDAQ: KOD) shares rocketed 75% from $22.75 to $39.76 Thursday after the retina-focused drug developer said it will accelerate its Biologics License Application (BLA) submission plans following positive topline data in its Phase III confirmatory GLOW2 trial (NCT06270836) assessing Zenkuda™ (tarcocimab tedromer) in diabetic retinopathy. GLOW2 was designed to replicate and extend the findings of Kodiak’s positive pivotal GLOW1 trial (NCT05066230) study, where Zenkuda showed superiority vs. sham therapy in patients with moderately severe and severe diabetic retinopathy. In GLOW2, Zenkuda showed superiority to sham with 62.5% of Zenkuda-treated patients achieving a ≥2-step improvement in diabetic retinopathy severity score (DRSS), vs. 3.3% of sham patients. Zenkuda also showed an 85% risk reduction in the key secondary endpoint of development of sight-threatening complications (2.4% with Zenkuda vs. 15.8% with sham), and a ≥3-step improvement in DRSS. Zenkuda is an anti-vascular endothelial growth factor (VEGF) intravitreal biologic based on Kodiak’s antibody biopolymer conjugate (ABC®) platform.
- Maze Therapeutics (NASDAQ: MAZE) shares nosedived 35% from $49.00 to $31.73 Wednesday despite reporting positive topline data from the Phase II HORIZON open-label trial (NCT06830629) assessing its lead program, the oral, small molecule, dual-mechanism APOL1 inhibitor MZE829, in broad APOL1-mediated kidney disease (AMKD). Maze said it will advance MZE829 into a pivotal program after data showed that treatment with MZE829 led to a 35.6% mean reduction in proteinuria, measured by urinary albumin-to-creatinine ratio (uACR), at week 12, with 50% of patients achieving more than a 30% reduction in uACR. A subgroup of AMKD patients with severe focal segmental glomerulosclerosis (FSGS) showed a 61.8% mean reduction in uACR following treatment with MZE829. Published reports, however, cited three reasons for the drop: the small study size (15 safety-evaluable patients and 12 efficacy-evaluable patients); profit-taking by investors; and concerns about MZE829’s performance compared with inaxaplin, another therapy in clinical studies for AMKD patients with FSGS being developed by Vertex Pharmaceuticals (NASDAQ: VRTX).
- Sarepta Therapeutics (NASDAQ: SRPT) shares jumped 35% from $17.61 to $23.77 Wednesday after the developer of precision genetic therapies for rare diseases shared its first clinical results from two small interfering RNA (siRNA) programs designed to treat neuromuscular diseases. Results from Sarepta’s Phase I/II ascending dose studies of SRP-1001 for facioscapulohumeral muscular dystrophy type 1 (FSHD1) and SRP-1003 for myotonic dystrophy type 1 (DM1) showed dose-dependent muscle exposure, early biomarker effects, and favorable tolerability—results that the company said showed differentiated efficacy for its αvβ6 integrin-targeted delivery platform. Sarepta also said it generated proof-of-concept data, which showed that after a single dose, both SRP-1001 and SRP-1003 supported knockdown of the target protein or mRNA. Sarepta said the two therapies were well-tolerated with no dose-limiting toxicity, allowing for continued dose escalation, and also showed successful target engagement with emerging biomarker evidence of “potentially meaningful” treatment efficacy.
