Yet again we are seeing an incredible amount of volatility in the biotechnology space this week. A number of low float companies have moved on various inputs, with some registering gains in the hundreds of percentage points during the session on Tuesday. Here is a look at some of the biggest movers with a discussion of what is moving each and where we expect the companies in question to go next.
The two companies in our crosshairs for the session today are Celsion Corporation (NASDAQ:CLSN) and Endocyte, Inc. (NASDAQ:ECYT).
Let’s kick things off with Celsion.
This one is all about clinical trial data – a classic biotechnology driver and one that has the potential to change the game for company overnight; and that is what we are seeing here.
At the start of this week, Celsion went for little more than $1.50 a share. It will open this morning at $6.85 having registered a 300% run during the session on Tuesday and a further 13% early morning Wednesday. The run comes on the back of, as mentioned, some clinical trial data, and specifically related to a development asset called GEN-1. It’s a DNA-based immunotherapy drug and Celsion is investigating it as a potential therapy for patients with ovarian cancer when used in combination with standard of care for the treatment of newly-diagnosed patients with advanced Stage III/IV versions of the disease.
These are very late stage patients and prognosis is bleak as things stand, so the ability for Celsion to demonstrate that it might have created a drug that can expand treatment options in this population is going to inject some real-time momentum into the company’s share price – and that’s what happened.
The trial showed that the drug combination can convert the tumor microenvironment into one that is conducive to treatment with an immuno-oncology asset and, further, that it can convert tumor naïve T-cells into cytotoxic effector T-cells in the altered microenvironment in question.
In other words, it could make a real difference impact of standard of care treatment in these patients.
That’s what’s exciting about this development and, if the company can replicate the data as the trial matures into later stages, it’s going to continue to appreciate along the way.
Moving on, let us look at Endocyte.
Earlier on in the year, Endocyte announced that it was on the lookout for a fresh asset to bolster its development pipeline and, this week, we learned that the company has licensed a pancreatic cancer drug from a German entity called ABX GmbH. The drug is called 177Lu-PSMA-617 (there’s a good chance we will see a revised name near term) and it is designed to improve the selectivity with which a patient’s dosing regimen targets cancer cells and, by proxy, avoids healthy cells.
This, in turn, is designed to help improve the side effect profile of treatment, of which cancer is known globally for being incredibly debilitating.
Endocyte has paid $12 million upfront for the drug and there is a further $160 million in milestone payments slated for release at various points along the development and commercialization pathway.
In terms of response, the company is up more than 319% from last week’s close price and gained more than 60% during yesterday’s session alone.
Why is the licensing of a drug having this sort of response?
Well, it’s all about development readiness.
The drug in question, 177Lu-PSMA-617, has already been subject to extensive testing in human patients in Germany as part of both efforts carried out by ABX GmbH and by various research institutions in Europe. This means that there is a wealth of available data to demonstrate safety and early-stage efficacy and Endocyte can incorporate this data into its collection program. Most importantly, this incorporation allows for the drug’s immediate advance into a phase 3 clinical trial that, if successful, will underpin a registration application in the US.
It’s rare that a company goes from a preclinical entity to a phase 3 one so rapidly and, given that the phase 3 will kickoff as early as the first quarter of next year and that, in turn, we could see a registration application submission within 18 to 24 months, Endocyte is a different company today than it was just last week.
That’s why markets are trading up on the stock and it’s why we expect the company to continue appreciating into the initiation of the above discussed pivotal trial.