What: Shares of the oncology company Progenics Pharmaceuticals (NASDAQ:PGNX) climbed by as high as 22% in early morning trading today after the company announced that its flagship clinical-stage product, Azedra, was granted Breakthrough Therapy designation by the Food and Drug Administration for the treatment of patients with recurrent pheochromocytoma and paraganglioma -- two extremely rare types of neuroendocrine tumors that affect the sympathetic nervous system.
This experimental radio-therapeutic is currently in a pivotal midstage trial being conducted under a Special Protocol Assessment Agreement, or SPA, with the FDA. According to Progenics, the FDA and the company have agreed upon a surrogate primary endpoint, per the terms of the SPA, that could be used to seek approval, depending on the outcome of the ongoing trial.
So what: Azedra's designation as a Breakthrough Therapy will give Progenics considerably more access to the agency as this radio-therapeutic winds its way through the clinical trial process, and potentially toward a regulatory filing. That said, it does not lower the bar in terms of how rigorously the FDA would review Azedra, if it gets to that stage.
Now what: Progenics is aiming to gain a regulatory approval for Azedra at the close of its ongoing midstage trial. But while it's always a good thing for investors when a small biopharma can forgo an expensive late-stage trial, you should bear in mind that this study isn't scheduled to read out until 2017. So, Progenics probably won't be in a position to bring another product to market for at least another two years, if not longer. That's why you may not want to chase this stock today following this positive regulatory development.