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Here's Why Cerevel Therapeutics Stock Is Shooting Through the Roof Today

By Cory Renauer - Jun 29, 2021 at 12:35PM

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Positive topline results from the company's schizophrenia candidate were better than expected.

What happened

Shares of Cerevel Therapeutics Holdings (CERE -1.23%) are surging after the Pfizer (PFE -0.72%) spinoff reported topline results for an experimental new schizophrenia drug.

Successful topline data make it look like Pfizer shouldn't have spun off a handful of neuroscience therapy candidates three years ago. Investors excited about the road ahead of Cerevel pushed the stock 95.8% higher as of 11:47 a.m. EDT on Tuesday.

Excited investor looking at a laptop.

Image source: Getty Images.

So what 

Cerevel Therapeutics doesn't have any products to sell at the moment, but that could change in a couple of years. This morning, expectations for the clinical-stage biotech's lead drug candidate, CVL-231, shot way up thanks to successful data from a phase 1 clinical trial with schizophrenia patients.

During the placebo-controlled trial, which was designed to find a safe dosage for use in upcoming studies, patients treated with a 20 milligram daily dose of CVL-231, and patients treated with a 30 milligram daily dose showed significant improvements.

Average scores on the positive and negative syndrome scale (PANSS) from the 30-milligram cohort were 19.5 points lower after six weeks than at baseline. That was 12.7 points lower (and thus better) than the reduction recorded from the placebo group. In the 20-milligram cohort, PANNS scores fell 17.9 points, which was 11.1 points lower than patients given a placebo.

Now what

If CVL-231 makes it all the way over the finish line, Pfizer's in line to receive milestone payments and a tiered royalty percentage that could top out in the mid-teens. This is the first clinical trial with this drug candidate, so there's still a lot that could go wrong before Cerevel Therapeutics ever makes a sale.

While CVL-231 winds its way along the development pathway, Cerevel will get lots of chances to impress investors. The company is currently running clinical trials with five different new drug candidates.

With a helping hand from Pfizer to develop a pipeline dripping with potential new blockbuster drugs, this biotech stock has a good chance at delivering long-term gains for patient investors.

Cory Renauer 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

Cerevel Therapeutics Holdings, Inc. Stock Quote
Cerevel Therapeutics Holdings, Inc.
$34.43 (-1.23%) $0.43
Pfizer Inc. Stock Quote
Pfizer Inc.
$49.75 (-0.72%) $0.36

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