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Why Mustang Bio Stock Is On Fire Today

By George Budwell – Apr 18, 2019 at 10:58AM

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A new gene therapy could be a functional cure for "bubble boy" disease.

What happened

Shares of the tiny gene therapy company Mustang Bio (MBIO -5.37%) erupted higher in premarket trading this morning, gaining a jaw-dropping 358% at its peak in early-morning action. What fueled Mustang's surging stock this morning?

Mustang's shares are blasting off in response to the news that an experimental gene therapy, MB-107, for "bubble boy" disease -- also known as X-linked severe combined immunodeficiency, or XSCID for short -- reportedly cured eight boys with the deadly condition. Equally critical, Mustang said that the boys are showing no signs of unintended side effects from the therapy -- an issue that has derailed prior gene therapies for XSCID. Mustang licensed MB-107 from St. Jude Children's Research Hospital. 

Businessman sitting at desk appearing to be pleased after throwing hundred dollar bills into the air.

Image Source: Getty Images.

So what

Bubble boy disease is a rare genetic condition that results in a severely impaired immune system. As a result, patients with XSCID are extremely susceptible to infections, which often forces them to live in sterile environments. If these promising efficacy and safety results hold, however, this high-profile genetic disease might finally have a viable treatment option -- perhaps even a cure. Given this breakthrough result, it's no wonder investors are piling into this small-cap gene therapy stock today.      

Now what

Investors shouldn't get overly excited at this early juncture, however. Mustang still needs to wait for additional data prior to filing for MB-107's regulatory approval, and that's not an issue to take lightly. Many once-promising gene therapies, after all, have gone haywire at the last second.  

That's not to say that Mustang's bubble boy treatment is destined to hit a speed bump, but caution is always warranted when it comes to early-stage studies that yield seemingly game-changing results. Stated simply, Mustang's stock is arguably only suited for ultra-aggressive investors at this stage -- despite these highly encouraging trial results. 

George Budwell 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.

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