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Why Shares of Ziopharm Oncology Jumped on Wednesday

By Jim Halley – Sep 1, 2021 at 4:36PM

Key Points

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The company hopes to develop cancer treatments based on individualized gene therapies, and has two promising pipeline candidates.

What happened

Shares of Ziopharm Oncology (TCRT -0.20%) rose more than 10% on Wednesday. The stock, which closed at $1.63 on Tuesday, opened at $1.65 on Wednesday and rose as high as $1.84 in midday trading. But it's still closer to its 52-week low of $1.26 than it is to its 52-week high of $5.95.

Workers in a gene-therapy lab.

IMAGE SOURCE: GETTY IMAGES

So what

Ziopharm stock had been on a steady slide, and is down by more than 23% this year. Investors were apparently encouraged by the appointment of a new CEO, Kevin S. Boyle, late Monday. Boyle previously was CEO of Kuur Therapeutics until that company was purchased by Athenex.

Ziopharm's focus is on fighting cancer through T-cell therapies. Its lead candidate therapy uses its Sleeping Beauty gene transfer technology, and is being tested as a genetically modified T-cell receptor (TCR) to fight neoantigens (mutations) that are often unique to individual cancers. The therapy is in a phase 2 trial against multiple solid tumors and is being developed in partnership with the National Cancer Institute. The company also has a phase 1 trial underway (in partnership with Eden BioCell) for its CAR-T cell therapy to fight leukemia and lymphoma by programming cells to fight known antigens that are present in both cancers.

As a clinical-stage biotech, the company has no marketed therapies yet and no revenue. As of its second-quarter report, it had $76.7 million in cash, not counting a $25 million line of credit it received from Silicon Valley Bank as part of a $50 venture debt facility, the company said during its earnings call.

Now what

Like many biotech stocks, Ziopharm is a risky investment. It may be that the company is looking forward to being acquired by a larger biotech; the arrival of Boyle, who is fresh off just such a deal, may point toward that strategy. For long-term investors, the key factor to watch now will be how its TCR therapy performs in its phase 2 trial. The company is still a long way from having a marketable drug, but at least it has two solid candidates, as well as other therapies in the preclinical stage.

The stock has been volatile, which isn't unusual for a clinical-stage biotech company with no real revenue yet. And given that it's trading at a little less than $2 a share, it doesn't take much in the way of a rumor to drive the stock's price up or down noticeably.

Jim Halley 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.

Stocks Mentioned

Alaunos Therapeutics, Inc. Stock Quote
Alaunos Therapeutics, Inc.
TCRT
$0.64 (-0.20%) $0.00
Athenex, Inc. Stock Quote
Athenex, Inc.
ATNX
$0.20 (-3.76%) $0.01

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