Shares of clinical-stage biopharma Idera Pharmaceuticals (NASDAQ:IDRA) jumped over 11% today without any company-specific news. Why? The two leading RNA-based genetic medicine companies were making waves and grabbing headlines -- and this tiny biopharma just so happens to be developing a similar therapeutic approach.
To recap, Alnylam Pharmaceuticals reported more details on the phase 3 trial of its lead drug candidate, which appears to be vastly more effective than a drug candidate from Ionis Pharmaceuticals in the same indication.
As of 3:26 p.m. EDT, the stock had settled to a 6.7% gain.
The news from the major players has essentially no implications for the early-stage pipeline of Idera Pharmaceuticals, but Wall Street's attempt to make something out of nothing is admirable.
The tiny biopharma is developing two unique drug-technology platforms, one of which is focused on something it calls third-generation antisense, or 3GA, technology. The main component of 3GA therapeutic candidates is something called a gene-silencing oligonucleotide, which works through mechanisms similar to the RNAi technology deployed by Alnylam Pharmaceuticals and Ionis Pharmaceuticals.
RNA-based medicines haven't had a great track record in the clinic, so in that sense today's news is a step in the right direction for the technology space in general. But it's a big leap for Idera Pharmaceuticals shareholders to make.
Investors could take another leap by reading into the collaborations in the space. GlaxoSmithKline recently handed back the rights to Ionis Pharmaceuticals' seemingly inferior drug, but remains committed (so far) to Idera Pharmaceuticals' 3GA platform. That deal, however, was announced in late 2015, and has more to do with blue chip pharma giants spending money to create many shots on goal; it's not an outright vote of confidence in one platform over the other. In other words: Don't read too much into it.
It may be difficult to believe, but that's really the only reason for today's stock pop. Surprisingly, the gains could have staying power. That's because Idera Pharmaceuticals was harshly punished for a stock offering last month, and could be due for a least a slight recovery from the overreaction. Still, don't let today's development from an unrelated phase 3 trial get your hopes up for the early-stage pipeline of this tiny biopharma.