Shares of clinical-stage biotech Achillion Pharmaceuticals (NASDAQ:ACHN) gained a healthy 15.4% today on around three times the average daily volume. What's going on?
The company reported before the opening bell that the European Medicines Agency Committee for Orphan Medicinal Products issued a positive opinion on ACH-4471 for orphan status as a potential treatment for the rare kidney disorder known as C3 glomerulopathy, (C3G).
ACH-4471 is the company's lead product candidate. The drug is currently being assessed as a potential disease-modifying therapy in C3G, paroxysmal nocturnal hemoglobinuria, and immune complex-mediated membranoroliferative glomerulonephritis.
The big-ticket item is that orphan-drug designation in the EU comes with a whopping 10-year period of marketing exclusivity after approval. So, if approved, Achillion's shares would probably garner a noteworthy premium because of the drug's rather lengthy period of exclusivity in key markets abroad.
One of the most interesting aspects about Achillion is that it's exceptionally well capitalized for a company of its size and developmental state, thanks to its former hep C collaboration with Johnson & Johnson. Specifically, the biotech reported having a noteworthy $330 million in cash and cash equivalents earlier this month. That's a big deal, because it should translate into minimal dilution for shareholders as Achillion's early- to mid-stage pipeline for rare kidney ailments matures.
Is Achillion worth buying right now? While some analysts have pegged ACH-4471 as a potential blockbuster if it can strike gold in multiple indications, this company is still a long way from filing a regulatory application. As such, Achillion is arguably a worthwhile watchlist candidate at this juncture, but not quite a screaming buy.