A small Texas biotechnology company, Introgen (NASDAQ:INGN), hit one out of the park this week, rising over 22% Wednesday on news that one of its lead drugs, Advexin, was granted "Fast Track" designation by the Food and Drug Administration for treating head and neck cancers.

What's so great about that? To a cash-burning biotech like Introgen, which only has $26 million in the bank and is torching about $20 million of that annually, speeding up the time to market for its products is good for its corporate health, and hopefully the health of about 40,000 potential patients just in the U.S. It's also a "vote of confidence" as investors assume the FDA wouldn't want to expedite the approval process for a marginally effective drug.

The data that spurred the FDA action was an 88% increase in median survival time for patients. Plus, 73% of patients had tumors that stopped growing or actually shrank. As an added piece of good news, these responses were in patients with tumors resistant to chemotherapy.

Advexin is an ingenious drug that uses a disabled virus (one that causes the common cold, in fact) to deliver a gene called p53 to tumor cells. When this gene is mutated, cells can start dividing uncontrollably and turning into tumor cells. Advexin delivers a normal copy of p53 to tumor cells in order to restore order to the cells.

But wait, didn't the FDA ban gene therapy trials? Fortunately for Introgen, the cold virus is not a special kind of virus, called a retrovirus. Retroviral gene therapy trials have been stopped because they permanently alter a cell's genetic makeup. The virus that Advexin uses does not change a patient's DNA, so these trials were allowed.

Biotechnology stocks are event-driven, as anyone who's ridden the Genentech (NYSE:DNA) and Avastin roller coaster will tell you. So, traditional valuation of a cash-burning small-cap biotech like Introgen is impossible. Instead, an investor needs to understand clinical trials, potential markets, and a little bit of the science involved.

With Advexin in four Phase II trials for other cancers, in addition to another seven Phase I trials, you can be sure there will be a lot more events to make Introgen a wild ride. And that's just Advexin. Introgen has several other products in clinical trials at the moment.

David Nierengarten is a special contributor to The Motley Fool. He welcomes your feedback on our biotechnology discussion board.