What happened

Shares of Kura Oncology (NASDAQ:KURA) -- 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 (NASDAQ:SNDX), 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.