Please ensure Javascript is enabled for purposes of website accessibility

Why Rexahn Pharmaceuticals Inc. Jumped Higher

By Sean Williams – Mar 11, 2014 at 2:58PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Rexahn shares soar after reporting initial phase 1 results for solid tumor cancer drug supinoxin. Here's why investors may want to temper that excitement just a bit.

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of Rexahn Pharmaceuticals (NYSEMKT: RNN), a clinical-stage biopharmaceutical company developing therapies to treat cancer, nervous system disorders, and sexual dysfunction, rocketed higher by as much as 18% after announcing the initial results from its phase 1 dose-escalation study of supinoxin (previously RX-5902) for solid cancer tumors before the opening bell.

So what: According to the press release, the phase 1 study, which was initiated in August 2013, is still ongoing and a maximum tolerated dose (MTD) has yet to be reached. Rexahn notes that three drug cycles have been completed with no drug-related adverse events. Furthermore, as the press release notes, "Pharmacokinetic analysis has shown that SupinoxinTM displays dose-proportional exposure and an estimated oral bioavailability of 51%."

Now what: Long story short, supinoxin is well tolerated and its profile is consistent with what researchers saw from the drug in preclinical studies. Rexahn anticipates it will have full phase 1 data when the trial is completed later this year. This is clearly good news when a study translates successfully into human trials, but I would suggest not getting too worked up over these extremely early stage results. We have very little semblance of efficacy demonstrated as of yet and Rexahn hasn't even hit the drugs' MTD. I wouldn't stand in the way of investors wanting to add Rexahn to their watchlist, but as an investment I'd suggest keeping your distance until its pipeline is much further along than it is now.

Sean Williams has no material interest in any companies mentioned in this article. You can follow him on CAPS under the screen name TMFUltraLong, track every pick he makes under the screen name TrackUltraLong, and check him out on Twitter, where he goes by the handle @TMFUltraLong.

The Motley Fool has no position in any companies mentioned in this article. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.