The stock market momentarily lost some of its upward momentum on Wednesday, giving back a small portion of its gains over the past month. Most market participants blamed the downdraft on Washington's failure to make any further progress toward approving a stimulus spending package, as lawmakers remain engaged in debate over whether the likely deployment of coronavirus vaccines in the coming months will make it unnecessary for the federal government to spend more money to prop up the U.S. economy.
With so many people focusing on COVID-19, it's understandable that biotech stocks working with coronavirus vaccines and treatments have gotten a huge amount of attention. Yet today, Rocket Pharmaceuticals (RCKT 0.21%) and Greenwich LifeSciences (Nasdaq:GLSI) reminded investors that major medical advances are valuable even when they have nothing to do with the pandemic.
How the stock market fared Wednesday
Major market benchmarks finished lower, giving up early gains. The Dow Jones Industrial Average (^DJI +0.49%) held up the best, while the S&P 500 (^GSPC +0.78%) and Nasdaq Composite (^IXIC +1.29%) had successively larger losses.
|
Index |
Percentage Change (Decline) |
Point Change |
|---|---|---|
|
Dow |
(0.35%) |
(105) |
|
S&P 500 |
(0.79%) |
(29) |
|
Nasdaq Composite |
(1.94%) |
(244) |
Data source: Yahoo! Finance.
Soaring like a Rocket
Rocket Pharmaceuticals finished the day up a whopping 83%, rising to its best levels since 2015. The biotech had a big win in the treatment of a rare heart muscle disease.
Rocket's phase 1 trial of its RP-A501 gene therapy candidate is covering patients with Danon disease, a rare inherited disorder that can lead to severe or even fatal cardiomyopathy. Preliminary data from the trial was promising, showing that the therapy was well tolerated by patients with some evidence of providing a clinical benefit. In particular, RP-A501 showed increased gene expression and a reduction in the level of myocardial cell disarray and the accumulation of autophagic vacuoles that generally indicate the presence of Danon disease.
Image source: Getty Images.
Rocket is optimistic about the potential to treat Danon more effectively, but the treatment could have even more far-reaching impact. The biotech believes that if RP-A501 proves successful, it could chart a course for further gene therapy approaches for other forms of heart disease.
What's particularly encouraging for investors is that the big share-price gain came even though Rocket announced a secondary stock offering of up to $175 million. That money could help accelerate development efforts and lead to further advances for the small biotech.
Greenwich lights up
Meanwhile, shares of Greenwich LifeSciences soared almost 1,000%. They climbed even further in after-hours trading following the 4 p.m. EST stock market close.
Greenwich has been working on its GP2 immunotherapy to prevent recurrences of breast cancer in patients who have previously undergone surgery. A phase 2b trial showed evidence of greater disease-free survival rates for those taking GP2 in combination with other drugs compared to patients taking only the other drugs. Indeed, the trial involving 138 patients showed no recurrences at all for the GP2 group.
Armed with these results, Greenwich is now looking to find clinical trial partners to move forward with a phase 3 trial. The move higher for the stock has been a big win for investors in Greenwich's IPO, which happened less than three months ago.
Biotech stocks are big gambles, and investors can lose everything if a treatment doesn't work as planned. But Greenwich and Rocket are good reminders that when things go well, it can lead to excellent outcomes for shareholders -- and for the patients who will benefit from their treatments.
