Investors looking for some unseemly gains will often pivot to the biotech space, a segment for which the term high-risk/high-reward might possibly have been coined. Bear or bull, it can make no difference to these names, which can soar or crash, depending on specific events such as regulatory approval/rejection or strong/disappointing results from a clinical trial.
Even so, the gains posted by Ambrx Biopharma (AMAM) in Friday’s session are unusual and particularly eye-catching. The stock soared to the tune of a hardly believable 1007% after the company announced pleasing results from the mid-stage testing of its breast cancer drug ARX788.
In the Phase 2 ACE‑Breast-03 study, which took place in the U.S., Korea, and Australia, the drug was assessed as a treatment for HER2-positive mBC (metastatic breast cancer) patients who are resistant or refractory to T-DM1.
The preliminary results showed a 51.7% overall response rate (ORR) and 100% disease control rate (DCR) following treatment with ARX788. Additionally, no drug-related serious adverse events (SAEs) were noted by any patients.
With investors reacting the way they did, it’s safe to say they were impressed with the results; considering how big the breast cancer market is, the drug’s potential has caused a bit of a stir.
Cowen analyst Phil Nadeau also likes what he’s seeing here, noting: "ARX-788 continues to have a good safety profile with no AEs leading to discontinuation or drug-related SAEs. Our consultants have called ARX788's activity in HER2 pretreated patients 'robust' and think that its activity in Enhertu and Kadcyla failures in particular is likely to ensure ARX788 a place in the treatment paradigm."
It should be noted, the results are preliminary and that it is still a mid-stage trial and further Phase 3 testing will be required, although given the strong results, the company might decide to try and fast-track this drug to approval.
Meanwhile, Amrbrx's partner NovoCodex Biopharmaceuticals is currently overseeing Two Phase 3 studies and one registration-enabled Phase 2 study with ARX788 in China. Data readouts are expected next year.
For Baird analyst Joel Beatty, the investment thesis for AMAM hinges on a “relatively large number of shots on goal compared to other biotech companies of its market cap.”
“Within the company's cash runway into 2025, we should get phase 1b/2 data for ARX 517 (anti-PSMA) and ARX 305 (anti-CD70),” Beatty elaborated. “Also, Ambrx's partnerships with NovoCodex, SIno Biopharm and BeiGene provide additional shots on goal.”
Overall, Ambrx has slipped under most analysts’ radar; the stock’s Moderate Buy consensus is based on just two recent Buy ratings. The average price target stands at $4, which is `~12% lower than its current value -- most likely a result of Friday's huge surge. (See AMAM stock forecast on TipRanks)
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Disclaimer: The opinions expressed in this article are solely those of the featured analyst. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.Click Here To Get Funded!