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Why Ziopharm Oncology Is Soaring 14% Today

By Todd Campbell - Aug 9, 2018 at 3:36PM

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The company's second-quarter update is fueling optimism.

What happened

After reporting second-quarter financial results that weren't surprising and updating investors on its clinical-stage drug pipeline, Ziopharm Oncology (ZIOP 1.94%) was up 14% at 3:30 p.m. EDT today.

So what

Ziopharm doesn't have any commercial-stage drugs yet, so it didn't report any revenue for the second quarter. The company's operating expenses declined to $12.4 million from $14.6 million one year ago, and its net loss was $17.5 million, or $0.12 per share, down slightly from a net loss of $17.7 million, or $0.13 per share, last year.

A man in a suit speaks into a megaphone in front of a chart showing an ascending stock price.


In terms of research and development (R&D), the company's still enrolling patients in a B-cell lymphoma phase 1 trial that's evaluating its second-generation chimeric antigen receptor T-cell (CAR-T) therapy, and a phase 1 trial of its CD33 targeting CAR-T for leukemia. Patients with brain cancer also are being enrolled in trials evaluating Ad-RTS-hIL-12.

Additionally, the company says its working with the Food and Drug Administration (FDA) to answer their questions in order to remove the clinical hold that's been placed on trials evaluating its third-generation CAR-T. Management hopes to get trials of that therapy going by the end of this year, but it concedes that timeline could be delayed depending on its conversations with regulators.

Now what

The status of Ziopharm's third-generation CAR-T is one of the most important things for investors to watch. Its design could reduce the time it takes to engineer CAR-Ts for cancer patients from weeks to one or two days, an advantage that could help it close the gap with leading CAR-T players that have already secured FDA approval.

Also important is the company's cash position. Clinical trials are incredibly expensive, and the company's cash stockpile has been shrinking, causing concern that management will have to issue more shares to shore up its funding. It had just $51 million in cash on the balance sheet at the end of March, and according to management, it has only $40.4 million in cash exiting June.

Management says that amount can fund operations into Q2 2019, but that won't be long enough for it to get its drugs across the finish line. Given the company's need for money and its rising stock price today, it wouldn't surprise me if a secondary stock offering is announced soon.

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