Shares of Australia-based biotech Immutep Limited (IMMP -3.63%) rose sharply on Thursday thanks to the company's announcement of a regulatory update regarding one of its pipeline candidates, investigational cancer treatment eftilagimod alpha. Immutep Limited's stock ended the day up by 11.3% after jumping by as much as 14.8% during the trading session.
Immutep Limited reported that the U.S. Food and Drug Administration (FDA) granted the Fast Track designation to eftilagimod alpha in the treatment of recurring or metastatic head and neck squamous cell carcinoma (HNSCC). What does this mean? The Fast Track designation is given to drugs that fill an unmet medical need to expedite their development and approval. It ensures that the company in question and the FDA will work closely together at every step of the process.
One more perk of Fast-Tracked investigational drugs: The FDA allows rolling submissions from these experimental medicines. Rolling submissions of investigational drugs allow companies to submit completed sections of a New Drug Application (NDA) instead of submitting the entire application all at once, thereby speeding up the process. The FDA decided to grant eftilagimod alpha the Fast Track designation after the company released data from a phase 2 clinical trial of the medicine in combination with Keytruda (a cancer drug marketed by Merck) in the treatment of patients with HNSCC.
Shares of small-cap biotechs like Immutep Limited often rise as a result of positive regulatory updates. However, investors should focus on the long-term prospects of the healthcare company. As things stand, Immutep Limited looks like a risky bet given that it has no products on the market and most of its pipeline candidates are still in their early stages of development. The company does have quite a few big-name partners in the pharmaceutical field, including Merck, Pfizer, and others. This may indicate that Immutep Limited's investigational treatments are promising. Even so, I'd caution against purchasing shares of this biotech stock, at least for now.