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While Kodiak executives aren’t giving up on the drug, the trial results are a significant blow to the company. Shares in the biotech were trading below $11 apiece after closing above $50 on Tuesday. Last year, Kodiak stock climbed as high as $164 amid high expectations for its eye treatment.

Kodiak is running other trials of KSI-301 in other eye conditions as well as with monthly dosing in wet AMD, with results expected later this year and early next. But the company may need to run further trials to support KSI-301 in wet AMD given Wednesday’s results, Michael Yee, an analyst at Jefferies, wrote in a note to clients.

In its statement, Kodiak stressed that the majority of participants in the study showed visual and anatomic improvements on par with Eylea patients after being treated with KSI-301 every five months. But about 30% of trial volunteers on KSI-301 didn’t do as well, Kodiak said, leading to overall lower average gains in vision than Eylea treatment.

In retrospect, the study design was “insufficient” because that group of patients needed more frequent treatment, Kodiak CEO Victor Perlroth said in the company’s statement. Ongoing studies of KSI-301 allow for more frequent dosing and will offer a better understanding of the drug’s effects, he added.

Analysts also focused on a finding that 3.2% of patients in the KSI-301 group had intraocular inflammation, compared with none in the Eylea group. Kodiak said other studies have found an inflammation rate of between 1% to 4.5% with Eylea and said all the cases in its own trial resolved.

Still, “we don’t think KSI-301’s risk/benefit will be viewed favorably by safety-conscious retinal specialists,” Piper Sandler analyst Christopher Raymond wrote in a note to investors. And without a major advantage such as less frequent dosing, Kodiak may not be able to cut into Regeneron’s market share, he said.

Intraocular inflammation was reported in 4% of patients taking Novartis’ new eye drug Beovu in clinical trials, a safety worry that has weighed on its commercial launch. Sales of the drug totaled a modest $186 million last year, shrinking 2% over 2020.

Eylea sales jumped 17% to $5.8 billion last year and Regeneron expects its drug to retain market leadership despite the recent launch of a new AMD drug from Roche.

Kodiak went public in October 2018 and had been one of the biotech industry’s best-performing stocks since that time. With the plummet on Wednesday, however, the company’s share price was close to its initial public offering of $10.