What happened

Shares of Mirati Therapeutics (MRTX), a clinical-stage biotechnology company developing new cancer drugs, are on the move thanks to enthusiasm for its experimental KRAS inhibitor. Clinical trial results from Amgen (AMGN -0.07%) may clear a path for a similar drug in Mirati's early-stage pipeline. As a result, the stock has gained 15.7% as of 2:12 p.m. EDT on Thursday.

So what

Somewhat disappointing data for its lead candidate sitravatinib last year means there's a lot more pressure on Mirati's pair of experimental KRAS inhibitors. The furthest along the development path, MRTX849, targets tumors with the KRAS G12C mutation. This mutation is found in around 14% of non-small cell lung cancer (NSCLC) patients, plus a smaller proportion of colorectal cancer and pancreatic cancer patients.

Man in a suit drawing an upward-sloping chart

Image source: Getty Images.

Our first look at some human proof-of-concept data for MRTX849 isn't due until the second half of 2019, and investors were feeling anxious about a potential competitor. The stock is rising today because Amgen posted lackluster results from the first nine evaluable patients in a 22-patient study with its KRAS G12C inhibitor AMG 510.

Amgen's KRAS inhibitor aims for the same target as MRTX849, but not with much success. Among the first nine patients treated, just one exhibited a partial response.

Now what

With a much lower hurdle to leap over, MRTX849 has a much better chance of success if it reaches a commercial stage. Before you get too excited, though, it's important to remember that drug developers have been going after the KRAS oncogene from a few different angles without much luck.

Mirati's most advanced candidate, sitravatinib, looks like a dud, but the company will push ahead anyway. Following lackluster phase 2 results from a combination study with Opdivo, Mirati still intends to fund a phase 3 combination study.

Moving a potential new cancer drug into a pivotal study is a big deal, but investors should be concerned about Bristol-Myers Squibb's (BMY 0.67%) lack of interest. If it works as intended, sitravatinib could drive Opdivo sales much higher, but the big pharma isn't even funding a portion of the phase 3 study. That will put all of the risk on Mirati's shoulders.