What happened

Idera Pharmaceuticals (NASDAQ:IDRA) is up 14% at 11:46 a.m. EST after releasing data from a phase 1/2 trial testing its drug candidate IMO-2125 in combination with Bristol-Myers Squibb's (NYSE:BMY) Yervoy for the treatment of anti-PD-1 refractory metastatic melanoma.

That's a lot of scientific terms in one sentence, so let's break it down: IMO-2125 is a drug that stimulates toll-like receptor 9, which results in the activation of immune cells called T cells. Yervoy also activates T cells, but it does it by blocking a protein called CTLA-4 that downregulates T cells. Other drugs block PD-1, another protein responsible for downregulating T cells, but these patients failed -- are "refractory" to -- those therapies. Metastatic melanoma is skin cancer that's moved to other parts of the body.


Doctor looking at spot on patient's back under a microscope

Image source: Getty Images.

So what

Data from the presentation, which will be made at the 2017 Society for Immunotherapy of Cancer Annual Meeting on Saturday, shows that IMO-2125 is activating the immune system and the combination is causing the activated immune system to attack the tumor. IMO-2125 is delivered directly to the tumor, but T cells are also seen at other non-injected tumors, suggesting the immune cells are learning to attack the injected tumor and then seeking out other tumors.

Most importantly, though, Idera updated the clinical response data that was presented at the European Society of Medical Oncology (ESMO) Conference in September, saying that five patients had responded out of the 10 evaluable patients to date.

Now what

At ESMO, four out of nine patients evaluable at that time had responded, so it's hard to see how going from a response rate of 44% to 50% really justifies a double-digit gain. But Idera Pharmaceuticals' stock price is still below where it was after ESMO -- thanks to a large secondary offering last month -- so today's move may have more to do with a reset toward the correct valuation than the incremental increase in the response rate creating value.

Idera's ultimate valuation will be determined by a phase 3 trial, which the company plans to start in the first quarter of next year.