Pyxis Oncology Inc. (PYXS) released preliminary data Thursday from its ongoing Phase 1 studies of micvotabart pelidotin, known as MICVO, for treating recurrent or metastatic head and neck squamous cell carcinoma. The numbers looked solid on paper, but investors weren't buying it—literally. The stock tanked nearly 49% to close at $1.73.
Here's what the data showed: In the monotherapy cohort, the confirmed overall response rate hit 46% among 13 patients, including one complete response. The disease control rate reached an impressive 92%, with 12 of 13 patients showing significant tumor regression or control. The data reflects outcomes as of a November 3, 2025 cutoff.
On the safety front, MICVO appeared generally well tolerated. No Grade 4 ADC payload treatment-related adverse events of interest popped up, and there were no Grade 5 events (the kind that result in death).
The combination therapy results looked even better numerically. When MICVO was paired with Merck & Co. Inc.'s (MRK) Keytruda (pembrolizumab), the confirmed overall response rate jumped to 71% across 7 patients. Responses showed up even in patients who had previously received checkpoint inhibitor therapy and experienced disease progression—a notoriously tough population to treat.
The disease control rate in the combination cohort hit 100%, with all seven patients demonstrating significant tumor regression. These results came from a Phase 1/2 study evaluating MICVO with pembrolizumab in both first-line and second-line patients with recurrent or metastatic head and neck squamous cell carcinoma.
Why the Market Freaked Out
So if the response rates looked decent, why the massive selloff? William Blair analyst Andy T. Hsieh pointed to several thorny issues. First, there's the elephant in the room: the absurdly small sample size. The update only added nine new monotherapy patients since November 2024, making it nearly impossible to draw reliable conclusions about efficacy or competitive differentiation.
Then there's the tolerability problem. Hsieh flagged a 28% discontinuation rate, which sits well above the typical 10% to 15% seen in oncology trials. That's a big deal when you're trying to prove your drug can actually be used in the real world.
Add in shrinking cash reserves—the company's runway now extends only into the fourth quarter of 2026—and no major catalyst expected until mid-2026, and you've got a recipe for investor anxiety.
"Given the difficulty in drawing solid conclusions regarding Micvo's efficacy and competitive differentiation, and the uncertainties associated with durability of response and tolerability, against the backdrop of continued cash burn, we are reiterating our Market Perform rating on Pyxis shares," William Blair wrote Thursday.
The firm added: "While we are encouraged by the response rate, the small sample size (13 patients for monotherapy and 7 patients for the combination cohort) adds considerable uncertainty regarding the precision of reported metrics."
What Comes Next
Pyxis isn't throwing in the towel. The company plans to present updated data from the ongoing Phase 1 monotherapy study in second-line or later patients in mid-2026. In the second half of 2026, it also expects to share updated results from the Phase 1/2 combination study with pembrolizumab.
The company is currently mapping out the path forward to pivotal studies for MICVO, both as monotherapy and in combination with pembrolizumab, with additional details promised in 2026.
Financial Lifeline
On the funding front, Pyxis completed the sale of its rights to royalties from commercialization of Enzeshu (Suvemcitug for Injection) for a one-time cash payment of $11 million. This non-dilutive funding will support MICVO's development, and the company says its current cash runway should fund operations through data milestones and into the fourth quarter of 2026.
Pyxis shares were up 0.62% at $1.74 during premarket trading on Friday, a modest bounce after Thursday's brutal selloff.