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Here's Why Athenex Gained Over 43% Today

By Maxx Chatsko - Nov 19, 2019 at 3:55PM

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The title of a scientific abstract suggests that additional data from its lead pipeline program will bolster the case for regulatory approval.

What happened

Shares of Athenex (ATNX 0.57%) rose nearly 44% today after the company announced that it will present at the upcoming San Antonio Breast Cancer Symposium on December 13. That's not really news, as companies present at scientific meetings and conferences all the time. 

But astute investors picked up on the title of the abstract being presented: "Oral Paclitaxel with Encequidar: The first orally administered paclitaxel shown to be superior to IV paclitaxel on confirmed response and survival with less neuropathy: a Phase III clinical study in metastatic breast cancer." 

The title suggests that additional data from the company's lead drug candidate, Oraxol, will bolster its case for marketing approval as a treatment for metastatic breast cancer. As of 3:24 p.m. EST, the pharma stock had settled to a 40.6% gain.

A businessman tossing $100 bills into the air.

Image source: Getty Images.

So what

To be fair, investors learned all the way back in August that the phase 3 study evaluating Oraxol in metastatic breast cancer achieved a statistically significant advantage in response rate over the intravenous (IV) version of paclitaxel. 

But until now Athenex had shared only that its drug candidate demonstrated a "strong trend" in survival advantage. The title of the upcoming presentation suggests that further analysis of the data will allow the company to make stronger claims (such as claims of superiority), which would help the drug candidate to earn marketing approval.

Wall Street has penciled in big numbers for Oraxol, a combination of its P-gp pump inhibitor encequidar and oral paclitaxel, provided it gets the green light from regulators. RBC Capital analyst Kennen MacKay thinks the drug could achieve peak annual sales of $1 billion in the United States and another $1.5 billion internationally as a treatment for metastatic breast cancer. Other analysts aren't quite as optimistic, but many agree that the drug could generate peak annual sales of about $1 billion. Athenex has a market cap of only $1.2 billion. 

Now what

Athenex has a deep pipeline of oral oncology drug candidates that include its P-gp pump inhibitor encequidar. While most are in early-stage development, success in metastatic breast cancer might intrigue investors enough for them to keep this stock on their watchlist. That's especially true if Oraxol can gain regulatory approval and live up to its blockbuster potential, which would allow the company to fund the development of its pipeline with relatively little risk.

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