Why is Daiichi Sankyo stock falling today?

Daiichi Sankyo shares slipped 3.0% to ¥2,840 on Monday following the company's and Merck's decision to withdraw an application for a new lung cancer treatment in the United States. The pharmaceutical giants announced on Friday that they had dropped their application to the U.S. FDA for accelerated approval of an experimental lung cancer therapy known as ifinatamab deruxtecan.

The FDA had determined that the mid-stage clinical study data for the therapy did not meet the necessary criteria for an early release. This was the second time the companies had seen their co-developed therapies rejected in the U.S., with the previous rejection occurring last year after a late-stage study showed little meaningful efficacy in another lung cancer candidate.

Despite this setback, Daiichi and Merck have indicated their intention to continue assessing the therapeutic potential of deruxtecan.