ALMS Stock Clocks Worst Day After 57% Drop — What Drove The Selloff?

• The trial missed its main goals but showed benefits in a particular patient subgroup. 
• Chief Medical Officer Jörn Drappa called the subgroup effect “highly compelling” in a disease that still lacks a targeted oral therapy.
• Alumis remains on track to file for U.S. approval of envudeucitinib in moderate-to-severe plaque psoriasis in the fourth quarter.

Shares of Alumis Inc. (ALMS) collapsed 57% on Tuesday, clocking its worst day ever since its mid-2024 IPO, after the biotech said its mid-stage lupus study missed its main goals.

The selloff followed topline results from the Phase 2b LUMUS trial of envudeucitinib in moderate-to-severe systemic lupus erythematosus, or SLE, a chronic autoimmune disease in which the body's immune system mistakenly attacks healthy tissues, causing widespread inflammation and damage across multiple organs.

Trial Missed Overall Goals

The 48-week study enrolled 408 patients who received one of three doses of the drug or placebo. It failed its primary goal — a standard composite measure of overall disease activity — and key secondary measures of response and skin improvement in the full patient group.

A planned look at a subgroup told a different story. Patients with a common and well-defined lupus subtype posted stronger results on those same measures. Alumis said that group was unexpectedly under-represented in the trial, which weakened the overall readout. The drug was generally well tolerated, with no new safety issues.

Company Still Plans Next Steps

Chief Medical Officer Jörn Drappa called the subgroup effect “highly compelling” in a disease that still lacks a targeted oral therapy. The company plans to meet with regulators about a late-stage program focused on that patient group.

CEO Martin Babler said the data also support studying the drug in certain other diseases. Alumis remains on track to file for U.S. approval of envudeucitinib for moderate-to-severe plaque psoriasis in the fourth quarter, following successful late-stage trials.

Analysts Cut Targets, Keep Buy Ratings

Wells Fargo cut its price target on ALMS to $25 from $51 and kept an Overweight rating. The firm said the drop “seems overdone,” arguing there is a “credible path” to a Phase 3 lupus study and that the stock’s current value assigns little credit to the psoriasis program, which it sees as having a high chance of approval.

Baird, meanwhile, lowered its target to $27 from $35 and kept an Outperform rating.

How Did Retail Traders React?

On Stocktwits, retail sentiment around ALMS stock rose from ‘bearish’ to ‘extremely bullish’ over the past 24 hours, while message volume increased from ‘low’ to ‘extremely high’ level.

“Feels like the market's overreacting when it's really more of a "wrong patients, right drug" problem,” a Stocktwits user wrote, noting that the company only needs to screen the right people on the late-stage trial.

Another voiced optimism for a buyout, noting that company CEO Martin Babler sold his previous company, Principia Biopharma, to Sanofi in 2020. “Lilly gonna jump on this one,” the user said.

ALMS stock has fallen about 3% year-to-date. 

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