What happened

Shares of Strongbridge Biopharma (NASDAQ:SBBP) rose nearly 27% today after the company reported second-quarter 2018 earnings results and positive results from a late-stage study. Net product sales from Keveyis, the company's first approved drug, settled at $8.2 million during the first half of the year. Management expects the drug to achieve full-year revenue of $18 million to $20 million. Meanwhile, the company's second approved drug, Macrilen, launched in the United States at the end of July as a treatment for adult growth hormone deficiency.

The tiny biopharma from Ireland also announced positive top-line results for its drug candidate branded as Recorlev, which is being developed as a treatment for endogenous Cushing's syndrome. The disease is marked by abnormalities in the body's ability to manage levels of cortisol, a hormone that regulates stress responses.

As of 12:50 p.m. EDT, the stock had settled to a 13.1% gain.

Five arrows on a chalkboard rising higher.

Image source: Getty Images.

So what

In the first half of 2018 the business reported $8.2 million in revenue and a net loss of $34.8 million. Despite losing more money than in the first half of last year, investors are increasingly optimistic. After all, the rise in administrative expenses was mostly incurred ramping sales of Keveyis and preparing for the launch of Macrilen, while increased research and development expenses are mostly explained by the just-completed phase 3 study for Recorlev.

The positive late-stage results from Recorlev, which has received FDA orphan drug designation making the company think the drug can receive accelerated approval, means the company can have three drugs on the market or preparing for commercialization by the end of 2018. It will still be some time before the business is capable of turning a profit, but the biopharma appears to be firmly on the other side of the risky gauntlet of clinical trials. Plus, with $85.5 million in cash at the end of June, Strongbridge Biopharma is well-positioned to hit the ground running for the commercial activities just ahead.

Now what

Things are humming along for Strongbridge Biopharma right now. The company's approach to treating rare diseases has now been validated with two drug approvals and three positive batches of clinical data in late-stage studies. While the company is flying under Wall Street's radar with a market cap of only $234 million, it could be worth a closer look from biopharma investors, especially if the expanding portfolio of commercial products lives up to its potential.

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.