What happened
Shares of Longeveron (LGVN +8.14%), a clinical-stage biotechnology company headquartered in Miami, are soaring in response to good news from the U.S. Food and Drug Administration (FDA). Investors excited about an orphan drug designation for the company's stem cell treatment pushed the stock 36.7% higher as of 10:37 a.m. ET on Friday.
So what
Longeveron is developing bone marrow-derived mesenchymal stromal cells for the treatment of a variety of age-related disorders including Alzheimer's disease. Today, the FDA granted the company's lead candidate, Lomecel-B, an orphan designation for the treatment of a rare condition called hypoplastic left heart syndrome.
Image source: Getty Images.
Generally, orphan drug designations aren't something to get excited about. The FDA hands them out like candy to just about anyone that intends to develop a drug for underserved patients with a rare condition.
Now what
If approved to treat hypoplastic left heart syndrome, this orphan drug designation can begin assisting Longeveron with a handful of useful benefits. The most important one is seven years of market exclusivity.
There isn't much of a difference between the bone marrow-derived stem cells in Lomecel-B and the stem cells biomedical scientists have been researching for decades. They've been renamed medical signaling cells in recent years, but evidence of a significant benefit for specific indications remains elusive.
Longeveron is now a good stock to buy, and betting against it could prove disastrous, too. In the first quarter of 2022, Longeveron intends to begin clinical trials with Lomecel-B as a treatment for Alzheimer's disease.
