What happened

Shares of Calithera Biosciences (NASDAQ:CALA) soared more than 25% after receiving an upgrade from analysts at Citigroup. The stock is now rated as a "buy," instead of "neutral." While that may seem insignificant, it could signal a bottom for shares, which have been steadily falling since November 2017.

To be fair, longtime Calithera Biosciences shareholders have little to complain about after the stock's epic rise in 2017 from just over $4 per share to $20 per share. The rise was well-deserved thanks to partnerships and expanded collaborations with Incyte and Bristol-Myers Squibb. As of 12:05 p.m. EST, the stock had settled to a 23.7% gain.

A person sitting on the ground using their laptop with cash money falling around him.

Image source: Getty Images.

So what

Calithera Biosciences has a promising oncology pipeline comprised of two named compounds and at least two other drug candidates in earlier stage trials. Its lead drug candidate is a glutaminase inhibitor called CB-839, which is being evaluated in four different phase 2 studies. It's also the drug in the partnership with Bristol-Myers Squibb. Incyte is helping to develop an arginase inhibitor called INCB001158, although it's in phase 1 trials.

While the pipeline will be expensive to develop, Wall Street has been cheering the fact that two deep-pocketed partners are on board. That should definitely help, as should the company's $166 million cash hoard calculated at the end of September.

Now what

Friday's news is seemingly insignificant, and may prove to be meaningless in the long run, but it could also remind investors that Wall Street isn't giving up on Calithera Biosciences despite its recent slide. There's still a long way to go for the tiny pharma, but it holds an intriguing amount of potential for a $300 million company.

Maxx Chatsko has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.