What happened
Shares of the clinical-stage gene therapy company Tenaya Therapeutics (TNYA +3.76%) rose by a staggering 49% over the first three and a half days of trading this week, according to data provided by S&P Global Market Intelligence. The biotech's shares caught fire in response to a wave of bargain buying in biotech, sparked by the buyouts of BELLUS Health and Prometheus Biosciences for enormous premiums earlier this week.
So what
Tenaya is an early-stage gene therapy player focusing on the development of treatments for heart disease. Recently, the company won an approval from the Food and Drug Administration (FDA) to begin a phase 1b trial for TN-201 as a potential treatment for hypertrophic cardiomyopathy (HCM) caused by mutations in the MYBPC3 gene. This mutation is the most common genetic cause of HCM, according to the company.
NASDAQ: TNYA
Key Data Points
Wall Street analysts are expecting big things from the small-cap gene therapy company. Underscoring this point, the consensus 12-month price target on Tenaya's stock implies an upside potential of 370% from current levels. With this bargain proposition in mind, it's not surprising to see shares perk up as investors hunt for deals in the out-of-favor biotech space.
Now what
Is Tenaya stock still a buy? It all depends on your comfort with risk. It is far from the first biotech to try to use a gene therapy to treat various forms of heart disease. So far, though, this cutting-edge approach hasn't yielded much in the way of positive results.
That doesn't mean that Tenaya can't succeed where others have failed, but this is a high-risk growth play to be sure.
