Tesaro (NASDAQ:TSRO) tumbled almost 25% on Monday as investors question its ability to differentiate its drug for chemotherapy induced nausea and vomiting (CINV) from existing NK-1 antagonists after missing secondary endpoints in two phase III trials. Rolapitant achieved the primary endpoint of complete response (CR) in the delayed period (24-120 hours) following initiation of chemotherapy in both a highly emetogenic chemotherapy (HEC) and moderately emetogenic chemotherapy (MEC). The missed secondary endpoints were overall complete response (0-120 hours) and acute complete response (0-24 hours). We believe the stock price movement is an overreaction and presents a buying opportunity for speculative, patient investors with over 100% potential upside versus 26% potential downside over the next 24 months.
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