What happened

Shares of Aptose Biosciences (APTO -1.04%) are up 11.5% as of 3 p.m. EST on Wednesday. This nice gain followed a huge move for the biotech stock on Monday. There were two major catalysts for Aptose. First, the company presented promising preclinical data for experimental drug CG-806 at the American Society of Hematology (ASH) meeting on Sunday. Second, Merck announced on Monday that it planned to acquire ArQule for $2.7 billion. ArQule's lead candidate, ARQ 531, is a Bruton's tyrosine kinase (BTK) inhibitor -- just like CG-806.

So what

Positive news often lights a fire beneath clinical-stage biotech stocks. And when there's two positive developments right on top of each other, it's like pouring gasoline on the fire. That's what we're seeing happen with Aptose.

Female scientist in lab holding two test tubes

Image source: Getty Images.

Merck's planned acquisition of ArQule underscores the interest in next-generation BTK inhibitors among big drugmakers. Aptose's preclinical data for CG-806 presented at ASH showed the potential for the drug to be even more effective than first-generation BTK inhibitor Imbruvica in treating chronic lymphocytic leukemia (CLL).

But while Aptose's shares have skyrocketed this week, it's important to keep things in perspective. Just because ArQule is being bought out doesn't mean that Aptose will become an acquisition target itself. Aptose also has a long way to go, with CG-806 and c-Myc oncogene inhibitor APTO-253 only in early stage clinical studies.

Now what

Aptose continues to make progress in both of its phase 1 clinical studies evaluating CG-806 and APTO-253. The CG-806 study targeting B cell malignancies should wrap up in late 2020. The study evaluating APTO-253 targeting acute myelogenous leukemia (AML) and myelodysplastic syndrome (MDS) is scheduled to be completed by the middle of next year.