Wave Life Sciences Crashes 50% As 'Body Composition' Fat-Loss Drug Underwhelms

Wave Life Sciences (WVE) stock crashed Thursday after the company’s much-hyped “body composition” drug led to just 1% weight loss over the course of six months.

The company’s drug, WVE-007, works by silencing the INHBE gene responsible for making the protein activin E. Activin E plays a role in fat utilization and balance.

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Patients given a single shot of WVE-007 lost 14% of their visceral fat and 5% of their total fat compared with the placebo group. Visceral fat is the fat that surrounds organs. High levels of visceral fat can lead to metabolic conditions like type 2 diabetes and liver disease.

Meanwhile, patients gained 2% lean mass and had a 3% decrease in waist circumference. But, overall, they lost just 1% of their body weight over the course of six months.

Wave Life Sciences stock plummeted 49.6% to 6.20.

Wave Life Sciences Faces Deflated Optimism

Leerink Partners analyst Mani Foroohar says Wave’s study “deflates INHBE optimism.” That could read through to Arrowhead Pharmaceuticals (ARWR), which is working on a similar approach to fat loss. Arrowhead stock fell 1.9% to 59.60.

Foroohar noted Wave Life Sciences has tested multiple doses of its drug. But, other than showing a higher knockdown of the activin E protein, patients who received the 400-milligram dose of WVE-007 didn’t lose more weight than the 240-milligram dosing group.

Still, Wave pointed to the fact that it enrolled more patients with a lower body mass index, or BMI, compared with other weight-loss drug studies. The company argues that greater reductions could be seen in patients with more severe obesity.

This “raises concerns on whether continuous Activin E knockdown provides added benefit (vs a threshold effect),” he said in a client note. “ARWR only shared fat reduction at 400mg, so (it’s) unclear if this is due to WVE’s construct or underlying INHBE biology.”

Foroohar says it’s hard to make comparisons between Wave’s and Arrowhead’s studies.

“Regardless, today’s update (and >50% fall in WVE stock) highlights the degree of optimism baked into INHBE expectations, and brings questions we previously raised back to center stage,” he said. “That being said, one should separate idiosyncratic factors vs INBHE broadly.”

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Follow Allison Gatlin on X/Twitter at @AGatlin_IBD.

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