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Why Adverum Biotechnologies Stock Is Soaring Today

By George Budwell - May 5, 2020 at 10:42AM

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Adverum's lead gene therapy candidate continues to impress in its early-stage trial.

What happened

Adverum Biotechnologies (ADVM 3.36%), a clinical-stage gene therapy company, is off to a particularly good start today. Specifically, the biotech's shares are up by a healthy 25%, on extremely heavy volume, as of 9:39 a.m. EDT Tuesday. 

Adverum's shares are blasting higher this morning in response to a positive clinical update for the company's experimental gene therapy candidate ADVM-022. Yesterday the company announced that the therapy was showing signs of robust efficacy and an acceptable safety profile in an early-stage dosing study in patients with wet age-related macular degeneration (wet AMD). 

A researcher in a lab coat pointing to an enlarged piece of DNA.

Image source: Getty Images.

So what

Adverum is essentially attempting to upend the $10 billion wet AMD drug market with ADVM-022. The basic idea is to supplant the current host of drugs -- such as Avastin, Lucentis, and Eylea -- with a one-and-done gene therapy. Based on the data so far, it seems ADVM-022 may in fact be able to achieve this lofty goal. What's more, the company even has a shot at growing the wet AMD market by leaps and bounds by increasing compliance among elderly patients. So this sizable move northward does have a solid rationale behind it.    

Now what

Is this red-hot biotech stock still a buy? While it could be a few more years before ADVM-022 is ready for its commercial debut, gene therapy companies have been exceedingly hot commodities on the merger-and-acquisition scene for a while now. So it wouldn't be surprising if one or more suitors emerged from the shadows in the wake of this impressive early-stage data. That being the case, risk-tolerant investors may want to grab a few shares of this top gene therapy play soon. 

 

George Budwell 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.

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Stocks Mentioned

Adverum Biotechnologies, Inc. Stock Quote
Adverum Biotechnologies, Inc.
ADVM
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