What happened

Shares in Affirmed (AFMD 0.20%), a clinical-stage, immune-oncology company, rose more than 12% on Wednesday. The stock closed at $6.12 on Tuesday, then opened at $6.22 on Wednesday, and reached $7 in the early afternoon. Over the past 52 weeks, the low for Affirmed stock was $4.42 with a high of $11.74. The stock has been on a roll and is up more than 18% this year.

A cancer patient holds a child on a porch with trees in the background.

Image source: Getty Images.

So what

Affirmed posted its third-quarter earnings last week. The company's financials had little to do with the stock's rise, though. The biotech company only makes a bit of collaboration revenue, but the other details in the report regarding the company's pipeline are what is pushing the stock.

Affirmed specializes in therapies that help patients' own cells by activating innate immunity (natural killer cells and macrophages), which are the body's first line of defense against cancer. Affirmed's therapies are concentrating on treating hematologic and solid tumors. The company calls its platform ROCK, which stands for Redirected Optimized Cell Killing.

The big news on the company's Q3 earnings call was regarding its lead candidates, AFM13 and AFM24. Both are being developed as monotherapies and in conjunction with other therapies, and have been well-tolerated by patients. In early trials, the therapies are showing strong antitumor responses in patients who have been treated with other therapies, the company said. Affirmed also announced that another of its cell engager therapies, AFM28, is expected to enter trials next year.

Now what

Like any clinical-stage biotech company, Affirmed is a gamble. Investors are counting on the Food and Drug Administration (FDA) approving the company's therapies and the drugs being marketable. If they are approved, that's a big deal, at least in the long term as many of the cancers the company is targeting right now are primarily treated with chemotherapies that have high toxicity levels and come with limitations on the duration of the body's response.

One relatable example of the potential of Affirmed's therapies is Adcetris (brentuximab vedotin), an antibody therapy that targets the CD30 protein to treat various lymphomas. Sold by pharmaceutical company Seagen, it has produced $529 million in revenue through the first nine months of the year.

The key for investors regarding Affirmed will be the continuation of positive trial results as the company has a long runway before its therapies can produce revenue.