What happened
Shares of Savara (SVRA -9.60%) rose more than 9% Tuesday morning after the company released first-quarter earnings. The stock is up more than 38% so far this year. Savara is a a clinical-stage pharmaceutical company that specializes in therapies to treat rare respiratory diseases.
So what
The company announced first-quarter earnings after the market closed on Monday. Savara doesn't have any revenue, so the numbers weren't what encouraged investors. It reported a quarterly loss of $10.6 million, or a loss of $0.07 in earnings per share (EPS), compared to a loss of $8.3 million, or an EPS loss of $0.05 in the same period a year ago.
The big news was that Savara's lead therapy, molgramostim, which is in a phase 3 trial, is expected to have patients fully enrolled in the trial by next month and a top-line readout is now expected for the second quarter of 2024. The company said it had $114.8 million in cash, enough to fund operations through 2025, CEO Matt Pauls said in the release.
Molgramostim, a novel inhaled biologic, is being tested to treat autoimmune pulmonary alveolar proteinosis (aPAP), a lung disease that affects fewer than 5,000 people in the United States. It fared well in phase 2 trials and has been granted Orphan Drug designation by the Food and Drug Administration (FDA) and the European Medicines Agency (EMA), along with Breakthrough Therapy and Fast Track designations by the FDA.
So what
Savara had an earlier phase 3 trial setback in 2019 on molgramostim. However, if this one is successful, the upside could be huge for the company.
While there's plenty of risk, as there would be with any nonprofitable company, approval for molgramostim would be a big deal. However, with so much riding on the therapy, another trial setback could send the stock plummeting.
