What happened

Shares of Ziopharm Oncology (NASDAQ:ZIOP) were zooming 13.1% higher as of 3:50 p.m. EDT on Monday. The big jump came after the company announced that the U.S. Food and Drug Administration (FDA) granted Rare Pediatric Disease Designation to Ad-RTS-hIL-12 with veledimex (also known as Controlled IL-12) in treating diffuse intrinsic pontine glioma (DIPG), a type of brain tumor.

So what

The FDA only grants Rare Pediatric Disease Designation to therapeutic candidates that treat diseases that meet specific criteria. These diseases must be serious and life-threatening and primarily affect children age 18 and under. The diseases also must impact fewer than 200,000 individuals in the United States. DIPG checks off these boxes.

Doctor reviewing brain MRI scans

Image source: Getty Images.

Ziopharm is currently evaluating Controlled IL-12 in a phase 1/2 clinical study targeting DIPG. Receiving Rare Pediatric Disease Designation means the company could be eligible to receive a priority review voucher from the FDA if the gene therapy is eventually approved. Ziopharm could then use the priority review voucher to shorten the FDA's review process from the usual 10 months to six months. Alternatively, Ziopharm could sell the priority review voucher to another company.

In addition to DIPG, Controlled IL-12 could be used in treating other types of brain cancer. Ziopharm is evaluating the gene therapy in a phase 2 study in combination with Regeneron's Libtayo in treating recurring glioblastoma (rGBM). It's also testing Controlled IL-12 in combination with Bristol Myers Squibb's Opdivo and as a monotherapy in phase 1 studies targeting rGBM.  

Now what

A more significant catalyst for the biotech stock could be on the way relatively soon. Ziopharm expects to submit initial data from its phase 2 study of Controlled IL-12 in combination with Libtayo for presentation later in 2020.