Please ensure Javascript is enabled for purposes of website accessibility

Here's Why Intra-Cellular Therapies Rose as Much as 176.8% Today

By Maxx Chatsko - Dec 23, 2019 at 11:13AM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The FDA approved the company's schizophrenia drug candidate.

What happened

Shares of Intra-Cellular Therapies (ITCI -0.75%) rose over 178% today after the company announced that the U.S. Food and Drug Administration (FDA) had approved Caplyta (lumateperone) for treating schizophrenia in adults. Regulators had previously set a deadline of Dec. 27 to make a decision on the drug candidate, but investors were unsure of the approval odds heading into this week. Now they have their answer. 

Today's news will allow Intra-Cellular Therapies to end 2019 on a high note. Shares of the company had underperformed the S&P 500 index since the beginning of the year, but they've now gained 188% year to date.

As of 10:39 a.m. EST, the pharma stock had settled to a 168% gain.

A businessman sitting with his laptop on top of a rocket ship.

Image source: Getty Images.

So what

As an antipsychotic drug, Caplyta will come with a warning notifying elderly patients of side effects that can lead to injury or death. Investors are relatively unfazed by that development given the relatively clean safety profile of the drug. In clinical studies, patients taking the drug were more likely to report sedation and dry mouth than those taking placebo. The former could lead to falls, which is a concern for elderly people. 

Intra-Cellular Therapies expects to launch Caplyta at the end of the first quarter of 2020. The company ended September with $255 million in cash -- more than enough to support market launch -- but the business reported an operating loss of $112 million in the first nine months of 2019. That makes it important to find market traction and begin generating revenue as quickly as possible. 

Now what

Investors are understandably thrilled with the news of marketing approval for Caplyta. It will become the first commercialized asset of Intra-Cellular Therapies, which is an important milestone for the prerevenue company. Now the business must execute and live up to its new $1.8 billion market valuation. 

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Intra-Cellular Therapies, Inc. Stock Quote
Intra-Cellular Therapies, Inc.
ITCI
$58.28 (-0.75%) $0.44

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning service.

Stock Advisor Returns
356%
 
S&P 500 Returns
124%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 05/28/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.