More good news today from American Pharmaceutical Partners (NASDAQ:APPX), a drug maker whose stock has been on a tear since our Foolish 8 screen identified it in the precursor to Motley FoolHidden Gems. The company announced early this morning that its breast cancer drug candidate, Abraxane, showed positive results vs. Bristol-Myers Squibb's (NYSE:BMY) Taxol in initial analysis of Phase 3 human trials.
The company reported a "higher objective tumor response rate and longer time to disease progression" among metastatic breast cancer patients for its souped-up nanoparticle version of Taxol (paclitaxal) compared to that current standard.
In cancer drugspeak, it doesn't get much better than this -- tumors respond better and the disease slows down. Not only that, but both Taxol and Abraxane are chemotherapeutic cancer agents, and the results also show that Abraxane was no more toxic than Taxol.
Because the FDA granted fast track status to Abraxane, the company can submit the data supporting its approval application as it rolls in, not just when it's complete, shaving a year or more off the lengthy drug development and approval process. There is more analysis of this data to come, but the company is licking its chops at the potential billions in revenue. One sign? It hired a national sales director this month to build the sales force for the drug's hoped-for launch.
Jeff Fischer's Three Companies to Watch lauded American Pharmaceutical Partners in April at a split-adjusted $9.88. Shares finished yesterday at $39.30. Nice -- and also perhaps why the stock only climbed a few points on the good news. But if Abraxane is approved and sells like Taxol's pre-generic competition $1 billion a year, the stock could well double again from here -- even accounting for a revenue split with privately held parent American BioScience.
The question is whether a double is worth the risk of further data disappointing, an FDA refusal, or even marketplace apathy. That's a question only your personal risk profiler knows for sure.
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