Shares of Relay Therapeutics (RLAY -1.13%), a clinical-stage biopharmaceutical company, have risen about 30% since the stock's closing price last Friday. Investors are highly encouraged by interim clinical trial data that suggest the company's new approach to drug development can produce a new blockbuster cancer treatment.
Relay Therapeutics is developing small molecule drugs to inhibit troublesome proteins that were previously considered undruggable. The biotech stock surged this week after the company reported positive interim data from a study with RLY-4008, a treatment candidate for bile-duct cancer.
RLY-4008 specifically targets a protein associated with aggressive tumor growth called FGFR2, without inhibiting a similarly shaped protein called FGFR1. Previous attempts to target FGFR2 have stumbled because of off-target toxicities. So far, 49 volunteers have been treated with RLY-4008 without signs of side effects associated with less selective FGFR inhibitors in the past.
Relay Therapeutics is saving the details for an upcoming scientific conference, but the results reported on Oct. 8 also suggest it's effective. Six out of six patients with FGFR2 mutation-positive bile cancer demonstrated tumor shrinkage after treatment with RLY-4008.
In January, Relay Therapeutics' collaboration partner Roche (RHHBY -1.67%) began a phase 1 trial with RLY-1971. Roche always holds cards close to its vest but we should see top-line results from this highly selective SHP2 inhibitor by next April.
Relay Therapeutics completed a secondary share offering on Oct. 12 that will add around $400 million to the company's cash cushion. This is probably enough to fuel operations through a pivotal study with RLY-5008, but I'll be surprised if Roche or another big pharmaceutical company doesn't make Relay Therapeutics a juicy buyout offer first.