CMPX Plunge Wipes Out $104M After FDA Demands Fresh Trial For Cancer Drug — Wedbush Sees Another 19% Downside

• LifeSci Capital downgraded Compass to Market Perform from Outperform.
• Wedbush cut the stock to Neutral from Outperform and slashed its price target to $1 from $5.
• Compass said it will keep talking with the agency while it prepares an application.

Shares of Compass Therapeutics (CMPX) plunged about 32% on Tuesday, clocking their worst day since April, after the U.S. Food and Drug Administration (FDA) said the company should run a new survival study before filing for approval of its lead cancer drug, prompting two Wall Street downgrades.

CMPX clocked a fresh 52-week intraday low on Tuesday at $1.15, before closing at $1.24. The day’s drop erased about $104 million of the company’s market capitalization.

Wall Street Reacts

LifeSci Capital downgraded Compass to Market Perform from Outperform. Wedbush cut the stock to Neutral from Outperform and slashed its price target to $1 from $5. The new price target implies a further 19% downside from the stock’s Tuesday closing price.

In a Tuesday release, Compass said the FDA recommended a trial showing a survival benefit before the company files a biologics license application for tovecimig in previously treated advanced biliary tract cancer, an aggressive bile-duct and gallbladder cancer with few later-line options.

Compass disagrees. It argues the existing Phase 2/3 COMPANION-002 study and the lack of good treatments should support a filing. The company said it will keep talking with the agency while it prepares an application. CEO Thomas Schuetz called the feedback unexpected but said the priority is finding a path forward. He said the company still sees meaningful activity in the study.

What The Trial Already Showed

Tovecimig is an experimental antibody designed to starve tumors of blood-vessel growth. Combined with the chemotherapy paclitaxel, it shrank tumors in 18% of patients versus about 5% on paclitaxel alone. It also delayed disease worsening: patients on the combination went a median 4.7 months before progression, versus 2.6 months on chemo alone, a 56% drop in the risk of getting worse. Safety looked in line with earlier studies.

Overall survival, the measure the FDA is now emphasizing, did not clear the statistical bar. Compass says that result is hard to read because many patients on chemo later crossed over to tovecimig and then lived longer, which lifted the control arm. Investors had already punished the stock in April when that survival miss first landed. Tuesday’s FDA message revived the same worry: regulators may not accept a filing without cleaner proof that patients live longer.

A new survival study would add time and cost. The company is still in clinical stages and has no FDA-approved drugs. Tovecimig is the company’s lead candidate. Other pipeline candidates are in earlier stages of development.  

How Did CMPX Retail Traders React?

On Stocktwits, retail sentiment around CMPX stock stayed within ‘bullish’ territory over the past 24 hours, while retail chatter remained at ‘high’ levels.

A Stocktwits user said that they are holding the stock, noting that the company has a “good amount of cash to maneuver.”

Another user, however, opined that the stock will fall further as it will take “years” for another trial.

CMPX stock has fallen 77% year-to-date. 

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