What happened
Shares of BioXcel Therapeutics (BTAI 4.21%), a biopharmaceutical company that specializes in neuroscience and immuno-oncology therapies, saw its shares rise 25.2% this week, according to data from S&P Global Market Intelligence.
The stock closed last Friday at $11.74, but rose to $13.90 on Wednesday. The stock's 52-week low is $9.08, and its 52-week high is $39. Overall, the stock is down more than 57% this year.
Image source: Getty Images.
So what
The rise was curious considering there was no news released by the company this past week and biotech stocks have had a rough year, with the Nasdaq Biotechnology Index down more than 23% so far this year. However, CEO Vimal Mehta was granted 15,000 shares of the stock on Monday, while senior vice president Javier Rodriguez and CFO Richard Steinhart were both granted 5,000 shares the same day. Investors may have taken that as a sign the company is excited about the potential for its first marketed drug, Igalmi (dexmedetomidine oral film), which is scheduled to be launched May 24.
The drug, administered under the tongue, was approved by the Food and Drug Administration (FDA) on April 6 to treat schizophrenia and bipolar disorder patients with acute agitation. It is also in trials to treat acute agitation for patients with dementia and major depressive disorder. If those trials pan out, and based on its results so far, that seems likely, the drug will have a greatly expanded label. While the company estimates there are roughly 7.3 million patients with schizophrenia or bipolar disorder, the number with dementia is far greater -- Alzheimer's Disease International puts the figure at 55 million worldwide in 2020, growing to 139 million by 2050, and one study estimates that at least 95% of dementia patients have had at least one episode of acute agitation.
Now what
The biotech company isn't profitable yet, but it has solid potential and a growing pipeline. The investment is a long-term one and isn't suitable for risk-adverse investors.
The question will be how much Igalmi will be worth once it hits the market. It will likely take a full year to know that. In the meantime, the company's first-quarter earnings showed it had $200 million in cash, not counting $260 million it has coming in financing. It lost $31.5 million in the quarter and that spending is likely to increase as it ramps up its marketing efforts.
