What happened
Shares of Alpha Tau Medical Ltd. (DRTS -1.42%) stock climbed 42% on Wednesday. The Israeli medical-device company is focusing on the commercialization of its Alpha DaRT (Diffusing Alpha-emitters Radiation Therapy) to treat solid tumors.
The stock closed at $10.32 a share on Tuesday, opened slightly higher at $10.60 on Wednesday, then soared to $14.55 by the afternoon. The stock wasn't far off its high of 14.99 while its low was $8.20.
Image source: Getty Images.
So what
The stock went public on the Nasdaq as part of a special-purpose-acquisition company (SPAC) merger with Healthcare Capital Corp. and began trading under its ticker on March 8. It's not surprising to see rapid swings in its stock price since the company is so new.
It's also become a popular meme stock. Although the company hasn't yet released any financials, it's already attracting interest.
The company's Alpha DaRT system was initially developed by two professors from Tel Aviv University. The current standard for radiation treatment of cancers is beta or gamma radiation that requires relatively high doses to be effective against cancer cells. The company said that alpha radiation, delivered precisely, is more effective at lower doses because it can destroy both strands of the DNA of a cancer cell.
Alpha Tau Medical has begun clinical trials on the product as a treatment for skin cancer, oral cavity cancer, breast cancer, and pancreatic cancer. The results of its first U.S. clinical trial as a therapy to fight malignant skin and soft tissue cancers showed compete response in all 10 treated tumors at 12 weeks, with no product-related adverse effects, the company said in January.
The company has also published 18 preclinical studies on the product's use on the previously mentioned cancer types in addition to colon cancer, adenocarcinoma (a type of non-small cell lung cancer), glioblastoma multiforme (a type of malignant brain tumor), and prostate cancer.
The most promising aspect of the Alpha DaRT system, the company says, is that it can safely administer alpha radiation with localized precision into solid tumors without damaging nearby healthy tissues. If found effective and safe, the system would have a broad range of applications, according to Alpha Tau Medical.
Now what
Though the medical-device company's product appears to be promising and was given a breakthrough-device designation to treat squamous skin cancer and oral cavity cancer by the Food and Drug Administration (FDA) last June, it hasn't yet been approved by the FDA. There are a lot of clinical trials that must be completed before that happens.
At this point, the stock is an attractive gamble, with no guarantee that it will ever have its main product approved or that the Alpha DaRT system will turn a profit.
