What happened

Shares of Provention Bio (PRVB) rose 30.3% in November, according to data from S&P Global Intelligence. The pharmaceutical company closed out October at $6.94 and opened November at $7. It rose to a 52-week high of $9.85 on Nov. 25 and closed out the month at $9.04. Its stock is up more than 67% this year. 

So what

The move up can be directly tied to the approval of Provention therapy Tzield (teplizumab-mzwv) by the Food and Drug Administration (FDA) on Nov. 17. The injectable therapy is the first FDA-approved drug to delay the onset of stage 3 type 1 diabetes (T1D) in patients 8 and older with stage 2 T1D. The disease happens when the body's immune system destroys the cells that make insulin, giving type 1 diabetes patients increased glucose levels that mean wearing an insulin pump or having regular insulin shots. 

The drug was approved after a phase 2 trial showed it delayed the average onset of stage 3 T1D by roughly two years, compared to a placebo. 

The approval is a big deal because there's no cure for type 1 diabetes and the number of people worldwide in 2021 living with T1D was estimated at 8.4 million, according to a report sponsored by the International Diabetes Foundation.

Now what

Getting FDA approval for Tzield is one thing, but the healthcare company now has to ramp up production and market the drug. To do that, it will likely need a little help. In the third quarter, the company reported it had $186 million in cash and cash equivalents and a net loss of $28.6 million, or a loss of $0.34 in earnings per share. The company will certainly profit from Tzield, but it will likely have to share those profits with Sanofi, thanks to co-marketing agreement in which Sanofi agreed to give Provention $20 million in return for the exclusive right of first negotiation toward Tzield's global commercialization rights. As it stands, Provention said it has enough cash to fund operations through only the next 12 months.

There's plenty of potential for Tzield label expansion. The company still has to finance its phase 3 trial of Tzield to treat patients with newly diagnosed insulin-dependent type 1 diabetes and expects to have data in the second half of next year. 

There's also the potential that Sanofi will look into purchasing Provention, which definitely makes the stock worth holding.