Shares of Pyxis Oncology (NASDAQ:PYXS) cratered 46% Thursday, the day after the company reported preliminary results from a Phase 1 study for its lead oncology drug candidate, PYX-201, prompting a downgrade by William Blair.

Late Wednesday, Pyxis reported that significant clinical responses were observed in the trial. Pyxis is testing PYX-201, an antibody-drug conjugate, as a treatment for various sold tumors, according to a statement.

The company also announced Thursday that it has entered into a clinical trial collaboration agreement with Merck (MRK) to test PYX-201 in combination with Merck’s (MRK) Keytruda in the treatment of head and neck squamous cell carcinoma, HR+/HER2- breast cancer, and triple-negative breast cancer and sarcoma.

William Blair downgraded Pyxis to market perform from outperform on Thursday, stating that while PYX-201 appeared to be active in late-line solid tumors, particularly head and neck cancers with a confirmed response rate of 33%, “we believe that it is difficult to differentiate among emerging investigational drugs in that setting, such as Merus’s (MRUS) petosemtabmab.

Blair added that Pfizer (PFE) and Genmab’s (GMAB) Tivdak also had a confirmed response rate of 33% in a Phase 2 study, but the companies decided against pursuing a monotherapy strategy for Phase 3 testing, “which in our view likely suggests a high bar for commercial success for the cancer indication.”

The investment firm said that based on the data, it was lowering it probability for success for PYX-201 to 10% from 35%. It added that as it doesn’t see another stock-moving catalyst event until the latter half of 2025, it expects the stock to trade around $2.80 per share in the near future.