Shares of Kymera Therapeutics (KYMR -5.47%) were soaring 18.4% higher as of 11:28 a.m. ET on Tuesday. The big jump came after the clinical-stage biopharmaceutical company announced on Monday that its partner, Sanofi, plans to expand the ongoing phase 2 studies evaluating experimental drug KT-474 in treating two skin conditions: hidradenitis suppurativa and atopic dermatitis.
Sanofi opted to expand the phase 2 studies of KT-474 to accelerate the advancement of the drug into pivotal testing. The French drugmaker's decision came on the heels of a positive preliminary review of KT-474's safety and efficacy data by an Independent Data Review Committee.
Why are investors excited about Kymera's news?
Anything that could potentially speed up the timeline for getting a product to market is great news for a clinical-stage biopharma company. Investors are justifiably thrilled with Sanofi's decision to expand phase 2 studies of KT-474.
The drug could have tremendous commercial potential if it does eventually win regulatory approval. Hidradenitis suppurativa is a chronic condition that causes painful lumps beneath the skin and represents an estimated $1 billion market. Atopic dermatitis is a chronic skin condition that represents an estimated $8 billion market. KT-474 could also target other autoimmune diseases.
Is Kymera Therapeutics stock a buy?
Risk-averse investors will probably want to stay on the sidelines with Kymera Therapeutics. There's no guarantee KT-474 will be successful in clinical studies and win approval. However, aggressive investors could consider this biotech stock. Kymera's market cap is only around $2.3 billion. If KT-474 is successful, the company might be worth a lot more within a few years.
