Why NGM Biopharmaceuticals Dived by 41% on Monday

For clinical-stage biotech companies, trial results are critical. On Monday, NGM Biopharmaceuticals (NASDAQ: NGM) reported very disappointing results from an investigative hepatitis drug and was summarily punished by investors, who drove the stock's price down by 41%.

NGM's discouraging news concerned aldafermin, which was being evaluated for use in patients with biopsy-confirmed nonalcoholic steatohepatitis (NASH), a form of fatty liver disease. 171 individuals took part in the study.

In the trial, the drug did not meet its primary endpoint of significant fibrosis improvement, although it did achieve statistical significance against its placebo on a number of secondary endpoints. These included the reduction of liver fat content.

Source Fool.com