Christmas is now in the rearview mirror but that doesn’t mean that things quickly return back to normal in the equities markets. Oftentimes, during the week between Christmas and new year, low-volume translates to erratic action and this can make for some pretty interesting trading and investment opportunities across the period.
In the biotechnology sector, of course, this sort of erratic trading is compounded by the potential for short-term catalysts to hit press, making the opportunities all the more interesting as and when they arise.
With this in mind, here is a look at two companies that are moving this week with a discussion of what’s driving each and where we expect the companies in question to go next based on their respective inputs.
The two companies in our crosshairs for the session today are DelMar Pharmaceuticals, Inc. (NASDAQ:DMPI) and Aptose Biosciences Inc. (NASDAQ:APTO).
So, first up, DelMar.
The FDA has been incredibly busy over the last few weeks, with what seems like a last-minute push to get some drugs on shelves in the US translating to a record year for 2017 on the approval front.
DelMar is another example of last-minute agency action, although it’s not quite at approval-stage yet. The company just put out news that the FDA has granted fast track designation to one of its lead development assets, a drug called VAL-083. VAL-083 is targeting recurrent glioblastoma (rGBM), which is one of the most common types of brain cancer and is a disease that, right now, has very little in the way of treatment options.
When a drug picks up fast track designation it’s in line for a whole host of benefits over a standard approval process, with these advantages primarily rooted in the time it takes for the agency to review the application that is in place to support an approval bid for the asset in question.
In order to qualify for FTD, a drug has to show promise in treating life-threatening diseases and address unmet medical needs. That the agency has served it to VAL-083, therefore, serves to validate the drug to some degree. Of course, it doesn’t mean the drug is definitely in line for approval – the drug will still have to demonstrate that it can be safe and effective in its target population – but it is a favorable development nonetheless.
And markets are recognizing this fact.
At the close of play on Wednesday, DelMar traded at a 34% premium to the price at which the company opened the session. Chances are we will see a continuation of this strength as we move into the New Year and the company closes in on the application submission for VAL-083.
Moving on, Aptose.
This one is, you guessed it, another FDA driven move. Aptose traded up close to 30% During the session on Thursday as the company put out news that the agency in the US has granted orphan drug designation for CG 806, its pre-clinical candidate for the treatment of patients with acute myeloid leukemia (AML).
This is another special designation and, while it’s not an accelerated approval type designation, it does bring with it a host of advantages as compares to a standard development program.
Basically, this one’s designed to help a company get a drug to market that’s targeting a rare disease (with a rare disease usually defined in the US as one that affects fewer than 200,000 individuals nationwide).
One of the more interesting elements of this designation (as in, specifically, the designation for CG 806) is that the drug is in its preclinical stages right now and – by proxy – hasn’t actually collected any clinical data that points towards safety and efficacy in its target AML indication.
The FDA doesn’t usually grant this one without at least some early stage in-human numbers, meaning that the preclinical data has been deemed to be incredibly strong and at least supportive of an early stage transition (and replication) as it makes the animal-human jump.
So, as mentioned, the company is trading up somewhere in the region of 20% on the back of the latest development and – just as with DelMar above – we’d be very surprised if the bullish action didn’t continue, at least near term.