Please ensure Javascript is enabled for purposes of website accessibility

Why Kura Oncology Is Skyrocketing Today

By Prosper Junior Bakiny – Updated Apr 28, 2020 at 3:10PM

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

Kura Oncology is riding the coattails of another clinical-stage biopharmaceutical company.

What happened

Shares of Kura Oncology (KURA 0.08%) -- a clinical-stage biopharmaceutical company that focuses on developing cancer treatments -- were up by 42.6% as of 1:49 p.m. EDT on Tuesday.

The company did not report any news, but its stock is probably riding the wave of Syndax Pharmaceuticals (SNDX -0.39%), another clinical-stage drugmaker whose shares are up by more than 50% as a result of positive data from a phase 1 clinical trial.

So what

One of Syndax's pipeline candidates is SNDX-5613, a potential treatment for leukemia. SNDX-5613 works by preventing the interaction between two proteins called menin and MLL, which play a central role in the growth of certain types of leukemia cells. Syndax released data from a phase 1 clinical trial for SNDX-5613 on Monday, saying that the data provided "the first clinical evidence that disrupting the interaction between menin and MLL1 with our potent and selective inhibitor, SNDX-5613, can induce response in patients with genetically defined acute leukemias."

Cancer cell

Image source: Getty Images.

Kura Oncology also has an investigational treatment for leukemia in its pipeline, KO-539, which works the same way SNDX-5613 does, by blocking the interaction between menin and MLL. KO-539 is currently in a phase 1/2 clinical trial, and investors are likely anticipating positive results from this trial based on the recent success of Syndax's SNDX-5613.

Now what

What should investors make of Kura Oncology's substantial gains on the stock market today? It's essential to remember that investing in clinical-stage biotech companies is a risky business. There's no guarantee that KO-539 will enjoy the same success in its phase 1/2 clinical trial that SNDX-5613 did, and even if it does, Kura Oncology will still have several hurdles to get through before it can hope to launch this potential treatment for leukemia on the market.

Kura Oncology does have other pipeline candidates, the most advanced being tipifarnib, a potential treatment for T-cell lymphoma, pancreatic cancer, and chronic myelomonocytic leukemia. And although the U.S. Food and Drug Administration recently granted a fast-track designation to tipifarnib for the treatment of T-cell lymphoma, betting on the success of Kura Oncology remains a long shot at this point. Investors would do well to stay away from this healthcare stock, at least for now.

Prosper Junior Bakiny 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.

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

Kura Oncology, Inc. Stock Quote
Kura Oncology, Inc.
$12.55 (0.08%) $0.01
Syndax Pharmaceuticals, Inc. Stock Quote
Syndax Pharmaceuticals, Inc.
$22.85 (-0.39%) $0.09

*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 analyst team.

Stock Advisor Returns
S&P 500 Returns

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 09/26/2022.

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.