What happened
Shares of GX Acquisition (GXGX) were soaring 26.8% as of 3:33 p.m. EDT on Friday. The big jump came after the special purpose acquisition company (SPAC) closed its merger with Celularity, a clinical-stage drugmaker focused on developing off-the-shelf cell therapies.
So what
GX Acquisition announced plans to merge with Celularity in January 2021. The two companies initially expected the deal to close by May 23, but the date was pushed back to provide time to address questions raised by the Securities and Exchange Commission.
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Investors appear to like the prospects for Celularity. The company's lead candidate is CYNK-001. Celularity is currently evaluating the experimental off-the-shelf cell therapy in phase 1 clinical studies targeting acute myeloid leukemia and glioblastoma multiforme (an aggressive type of brain cancer).
But it's difficult to accurately value clinical-stage biotech stocks, especially those with only early-stage pipeline candidates. There's no guarantee that Celularity's cell therapy approach will pan out. On the other hand, if it does, the stock could rise a lot higher.
Now what
Shares of the combined company, which will use the name Celularity, will begin trading on the Nasdaq exchange on Monday with the ticker symbol CELU. It hopes to have five clinical programs in development by the first half of next year.