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Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.
What: Shares of biotech company Infinity Pharmaceuticals (NASDAQ: INFI ) vaulted higher by as much as 19% after reporting phase 1 data on IPI-145 and providing an update on its PI3K-inhibitor program.
So what: Infinity definitely set a good tone to start the week by reporting that IPI-145, its oral PI3K-inhibitor targeted at hematologic malignancies, showed clinical activity in B-cell and T-cell malignancies. This means IPI-145 could have success in treating chronic lymphocytic leukemia, indolent non-Hodgkin's lymphoma, mantle cell lymphoma, Hodgkin's lymphoma, and T-cell lymphoma. In addition, Infinity updated investors on its PI3K program. First, it insinuated an expansion of phase 1 trials to include these five aforementioned diseases. Infinity also noted that it has an ongoing phase 2a allergic asthma trial for IPI-145 that it should be releasing data on in the first half of 2013. Finally, the company is in the process of planning for phase 2 trials of IPI-145 to treat rheumatoid arthritis.
Now what: It's definitely a great day to be a shareholder, but I'm not nearly as enthusiastic about Infinity's outlook. Infinity has only two drugs past early-stage trials and nothing approved by the Food and Drug Administration at the moment. I would love for its Hsp90 inhibitor, IPI-504, to be successful, but the truth of the matter is that the success rate in non-small-cell lung cancer is very low, especially for smaller biotechnology companies. For IPI-145, which appears like a do-it-all drug, we're still two to three years away from marketability in a best case scenario. That means more dilutive share offerings and the potential for plenty of negative data with the stock having run up so considerably already.
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