Shares of Stemline Therapeutics (STML), a small-cap clinical-stage biotechnology company with a focus on developing medicines to treat cancer, skyrocketed as much as 33% during Tuesday's trading session after reporting positive results from its pivotal midstage study involving lead drug SL-401.
As announced before the opening bell, the company's interleukin-3 receptor (CD123) targeted therapy for the treatment of blastic plasmacytoid dendritic cell neoplasm (BPDCN) met the primary endpoint of its three-stage phase 2 study. More specifically, in the third of three stages, the results showed that seven of 13 (54%) first-line BPDCN patients demonstrated a complete response, with an overall response rate of 77% (10 of 13 patients). Of the seven patients with a complete response, six of them remained relapse-free at the five- to eight-month mark.
Across all three stages, SL-401 led to a complete response (CR) rate of 60% for 45 patients (27 with CR) and an overall response rate of 82% (37 patients out of 45). When looking at all tested doses, the CR rate moved even higher to 69%, with an overall response rate of 88%.
Given these strong clinical results, along with feedback from the Food and Drug Administration (FDA), Stemline believes it's on track to begin submission of its Biologic License Application in the fourth quarter 2017 to first quarter 2018 time frame.
Also notable was commentary from Andrew Lane. M.D., Ph.D., Director of the BPDCN Center at the Dana-Farber Cancer Institute. Said Lane, "Given the presence of CD123 on additional aggressive hematological cancers, we are also exploring SL-401 in combination with other agents in clinical trials of high-risk MDS [myelodysplastic syndromes] and AML [acute myeloid leukemia]." The key here is that label expansion is a possibility after these strong results and the expression of CD123 on select malignancies.
With no approved products, positive results from SL-401 were absolutely needed to provide a catalyst for Stemline Therapeutics. There are no currently approved therapies to treat BPDCN, which could give Stemline a clear path to success if the FDA approves it. However, it may not be a huge revenue generator right off the bat, with BPDCN accounting for less than 1% of all hematologic malignancies and less than 1% of primary cutaneous lymphomas.
Prospective investors should also be aware that as a clinical-stage drug developer with research and development expenses, cash burn is a genuine concern. Stemline ended the second quarter, reported in August, with $93.2 million in cash, cash equivalents, and investments, but could be on track to burn between $50 million and $60 million annually to run its studies and keep the lights on. For clinical-stage drug developers, issuing common stock and diluting existing shareholders tends to be par for the course when raising cash.
To be clear, things are definitely looking up for Stemline. But with peak sales for BPDCN probably being modest at best, the real value here lies with the ability to potentially expand SL-401's label. Until we know more about the feasibility of this happening, it might be best to stick to the sidelines.