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.
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.
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.