XBiotech Inc. (NASDAQ: XBIT) saw its shares fall sharply after the company issued an update on its recent meeting with the European Medical Agency (EMA). The Oral Explanation meeting dealt specifically with the firm’s marketing authorization application (MAA) for its candidate antibody for the treatment of colorectal cancer. Unfortunately, the meeting did not live up to the company’s expectations.

A negative trend vote from this meeting would imply that it is unlikely that a positive Committee for Medicinal Products for Human Use (CHMP) opinion related to the XBiotech’s MAA will be attained at the formal decision vote scheduled in May. Accordingly additional steps would need to be taken to potentially gain marketing approval.

The key outstanding issues for the treatment were related to clinical relevance of the therapy in the indication and quality assurance related matters. The meeting, however, focused on outstanding clinical relevance issues.

Unfortunately the meeting did not yield the results that the company was looking for. In turn, John Simard, president and CEO, commented:

We are disappointed by the outcome of the meeting. We believe that the data speak in a clear and resounding voice to clinical relevance of a new antibody therapy in advanced colorectal cancer. We believe that findings from our Phase III study show that we have developed an important endpoint and methodology to evaluate anti-cancer therapy in advanced stage disease and that our monoclonal antibody represents a breakthrough treatment in patients with advanced colorectal cancer. The EMA marketing authorization application procedure enables the appeal of negative decisions from the oral explanation. We may seek access to this process at the appropriate time.

XBiotech’s True Human antibodies are derived without modification from individuals who possess natural immunity to certain diseases. With discovery and clinical programs across multiple disease areas, XBiotech’s True Human antibodies have the potential to harness the body’s natural immunity to fight disease.

Shares of XBiotech traded down more than 41% at $10.00 shortly after Friday’s opening bell. The consensus analyst price target was $26.00, and a 52-week trading range is $8.58 to $25.00.

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