What happened

Shares of AnaptysBio (NASDAQ:ANAB) jumped over 22% last month, according to data provided by S&P Global Market Intelligence. The beaten-up biopharma stock trekked higher after the development-stage company delivered a slew of pipeline updates alongside first quarter 2020 operating results.

Investors aren't quite ready to forget the high-profile failure of etokimab in late 2019, but enthusiasm appears to be building for the company's pipeline. The small-cap stock has now gained 28% since the beginning of 2020, although shares of AnaptysBio have lost 73% in the last year.

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Image source: Getty Images.

So what

AnaptysBio is developing a handful of monoclonal antibody drug candidates. The development-stage company has forged collaborations with GlaxoSmithKline in cancer and Bristol-Myers Squibb in inflammatory diseases, which distributes risk and allows the business flexibility to pursue the development of wholly owned assets. 

Investors have been left with mixed results. In 2019, AnaptysBio discontinued development of etokimab in atopic dermatitis and paused development in eosinophilic asthma. Top-line results from a phase 2 trial in nasal polyps are expected to be released in the third quarter of 2020, but investors remain mostly disappointed with the lead drug candidate, especially after the discontinued development for the two largest market opportunities. 

The disappointment with etokimab has been slowly replaced with enthusiasm for the rest of the pipeline. Top-line results for ANB019 from two separate phase 2 clinical trials in inflammatory diseases are expected before the end of 2020, while regulators have cleared ANB030 to begin clinical trials in cancer studies before the end of June.

Meanwhile, the up to $1.1 billion partnership with GlaxoSmithKline is delivering results. A drug candidate developed for endometrial cancer is expected to earn marketing approval from regulators in the United States and European Union in 2020. AnaptysBio has earned $15 million in milestone payments for progress made from the beginning of the year through May 2020, and expects to earn another $20 million in milestone payments before the end of the year.

Now what

At a market valuation of less than $600 million, AnaptysBio trades at a fraction of its former $3 billion market cap. The fall from grace isn't too surprising considering the disappointing results from etokimab, but investors are beginning to shake off their frustration and find other pipeline assets to get excited about.

Considering the business ended March with $412 million in cash and has several data readouts planned before the end of 2020, investors might want to keep a close eye on this small-cap stock.

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