What happened

Shares of Janux Therapeutics (JANX -0.31%), which specializes in immunotherapies to treat cancer, rose 33.1% this week, according to data from S&P Global Intelligence. The stock closed at $13.07 last Friday, opened at $13.27 on Monday, and climbed throughout the week, rising as high as $18.15 before closing at $17.50 on Friday. The stock is down more than 11% this year.

So what

The clinical-stage biopharmaceutical company's shares have been rising since it announced on Oct. 12 that its first patient had been dosed in its Phase 1 clinical trial of JANX007 to treat metastatic castration-resistant prostate cancer. The news was a milestone for Janux as JANX007 is the company's first product candidate using its Tumor Activated T Cell Engager (TRACTr) platform to engage T cells to fight tumors.

It's an early but key step for the company's lead product candidate, which had its investigational new drug (IND) application approved by the Food and Drug Administration in May. The announcement of the beginning of JANX007's first trial was expected, but still a sign of progress.

Another factor at play here is that there was a lot of short interest in Janux, with more than 3.4 million shares shorted. The move-up might be part of a short squeeze. The company went public last June through an initial public offering.

Any drug to treat prostate cancer has big upside. Prostate cancer is the most common and second-leading deadliest cancer for men in the U.S., behind only lung cancer, according to The American Cancer Society, which estimates 268,490 new cases and 34,500 deaths from prostate cancer this year.

Now what

Janux is a biotech play only for long-term investors who are not risk-averse. As of its second-quarter report, the company said it had no revenue, $354.3 million in cash and cash equivalents, and quarterly losses of $16.9 million. The company has a long way to go and a lot of hurdles to jump before it sees a profit. Still, the company's first clinical trial is in progress. It has another therapy, JANX008, that it plans to submit an IND application for later this year. That therapy targets the epidermal growth factor receptor (EGFR) gene, whose mutation can cause several types of cancer.