Let's take a look at today's top stories in biotech and health care. Keep an eye out for PTC Therapeutics (NASDAQ:PTCT), Inovio Pharmaceuticals (NASDAQ:INO) and Keryx Biopharmaceuticals (NASDAQ:KERX).
PTC shares skyrocket after positive CHMP opinion for DMD drug
PTC shares are up over 100% in premarket this morning after the company announced that the Committee for Medicinal Products for Human Use (CHMP) of the European Medicines Agency (EMA) issued a positive opinion for its experimental Duchenne muscular dystrophy drug, or DMD, Translarna. PTC is seeking a conditional approval for the drug as a potential treatment for DMD patients five years or older. According to the company, mid-stage clinical trial data showed a significant slowing of disease progression in DMD patients, helping them to perform better on the 6-minute walk test.
Looking ahead, this positive opinion will help to form the basis for a potential conditional approval that will be decided on by the European Commission. If approved, Translarna will still need to complete an ongoing late-stage study that is designed to confirm the findings in the smaller mid-stage trial.
Is this stock worth following after more than doubling this morning? If the current trend holds, PTC is in line to have a market cap of over $1 billion before the end of the day. That said, there is a dearth of pharmaceutical treatments for DMD patients, so it's quite possible that Translarna could sell very well if approved. As such, you may want to keep a close eye on this stock going forward.
Inovio announces a reverse split, shares fall
Shares of Inovio are down around 3% in premarket this morning following an announcement that the company plans to initiate a 1 for 4 reverse split. According to the press release, the move was approved by both a majority of shareholders and Inovio's Board, with an effective date to be announced at a later time.
What's important to understand is that this split is being announced only a few weeks ahead of the planned top line data readout for VGX-3100, Inovio's experimental cervical cancer vaccine. Logistically, a split and a higher share price would probably do wonders in regards to institutional investment for this small-cap biotech, if the top line data are positive. Presently, institutions hold only 15% of Inovio's outstanding shares, which has probably played a big role in the tremendous volatility in the company's share price over the last year.
On the flip side, a negative result for VGX-3100 would give the company room to raise funds for additional trials, without having to worry about potential delisting issues. In short, this is a smart move for the company, but its long-term consequences for shareholders won't be known until VGX-3100's data hit the Street.
FDA extends Zerenex's PDUFA date
Shares of Keryx Biopharmaceuticals are down around 3% in premarket trading this morning after the FDA announced that it will extend the target action date for the company's experimental drug for chronic kidney disease called Zerenex. Specifically, the agency pushed the date back by three months to September 7, 2014.
The reason investors are concerned this morning appears to be questions raised regarding the Chemistry, Manufacturing and Controls section of the New Drug Application, or NDA, for Zerenex. Because the agency deemed Keryx's response to these questions as a "major amendment", the agency said they will need additional time to review the changes.
Is it time to panic? Frankly, I don't think so. It's not unusual for the FDA to change regulatory dates or require amendments to NDAs. We simply don't have much insight into the nature of the questions that triggered the revisions right now.
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George Budwell has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.