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Delcath Systems, Inc. (DCTH - 3.67) has taken a major hit today, after the drug company confessed to disappointing trial data. This morning, DCTH admitted that the mid-stage results from the metastatic colorectal cohort of a recent Phase II trial of its chemosaturation system were inconclusive, due to a variety of factors impacting the patient group. However, the firm said "there is a solid clinical and scientific justification to conduct a new Phase II trial," which is expected to occur during the second half of 2012.
DCTH gapped lower out of the gate this morning, with the shares down roughly 11% at last check. However, today's drop simply continues a longer-term decline for the stock, which has given up nearly 58% of its value so far in 2011. Since late February, DCTH's downtrend has been highlighted by stubborn resistance at its 10-week and 20-week moving averages.
Unfortunately, DCTH looks very vulnerable to potential downgrades in the wake of today's disappointing news. According to Zacks, all five brokerage firms following the stock maintain a "buy" or better rating, leaving plenty of room for downward revisions. During the near term, any negative notes from this bullish group could spark a wave of fresh selling pressure on the shares.