G

Source: Agenus.

Clinical-stage biotech stocks can trade wildly based on the latest news on drugs in trials and that's especially true of small-cap biotech companies researching cancer treatments.

Because cancer drugs are among those most likely to fail in studies, results from trials under way at Agenus (NASDAQ:AGEN), Array BioPharma (NASDAQ:ARRY), and Idera Pharmaceuticals (NASDAQ:IDRA) could move shares significantly higher or lower in the coming year, so let's learn more about these companies and the drugs that they're developing.

Battling brain cancer
Agenus could soon be the beneficiary of low-single-digit royalties tied to sales of two GlaxoSmithKline vaccines -- one for malaria and another for shingles -- that use Agenus' QS-21 Stimulon to improve their efficacy, but a bigger needle-moving opportunity may exist for Agenus in brain cancer.

In phase 2 trials, Agenus Prophage vaccine delivered solid efficacy and safety results for use in patients with glioblastoma multiforme that include improved median progression-free survival and overall survival versus historical standard of care data.

Progression-free survival in patients with low levels of PD-L1 expression was 27 months versus five to nine months and overall survival was 45 months versus 15 to 19 months. In patients with high PD-L1 expression, there was also a benefit, but it was less pronounced.

As a result, Agenus is launching phase 3 trials of Prophage used alongside the current standard of care. If that approach succeeds, then Prophage could end up becoming part of a new go-to approach for treating the 27,000 Americans newly diagnosed with the disease every year and that could cause its shares to pop. 

A data dump approaches
In the past year, Array BioPharma has sparked investor enthusiasm by purchasing the rights to two cancer therapies from Novartis, which has been restructuring itself. In those deals, Array BioPharma obtained global rights to binimetinib and the melanoma drug encorafenib.

In September, Array BioPharma investors will start getting insight into whether those acquisitions were savvy when the company offers up preliminary phase 2 data for using the two drugs as a combination therapy. Additional insight will hit the tape when top-line phase 3 data for binimetinib are released -- most likely by year-end -- and when encorafenib results are announced early next year. If those phase 3 trials succeed, then a filing for approval for both drugs could come shortly thereafter.

In 2016, Array BioPharma should also get more insight on selumetinib, a drug the company licensed to AstraZeneca way back in 2003. Selumetinib is in phase 3 trials to treat specific variations of metastatic lung cancer and thyroid cancer. However, expectations for the drug were tempered in July when selumetinib fell short as a treatment for a rare form of eye cancer.

Overall, with data from three cancer drugs likely to read out data over the coming months, Array BioPharma shares could make a big move higher or lower.

Targeting genetic mututions
Idera is conducting two phase 1/2 studies to evaluate its IMO-8400 as a treatment for people with Waldenstrom's macroglobulinemia, or WM, and diffuse B-cell lymphoma who carry the MYD88 L265P oncogenic mutation.

The company estimates that IMO-8400 could benefit up to 90% of the 1,200 Americans diagnosed with WM and 30% of the 2,000 Americans diagnosed with diffuse B-cell lymphoma every year. That's not a very big addressable patient population, but it is a population that would benefit from additional treatment options and that could also support a high-priced therapy. If so, IMO-8400 could still be a commercially viable drug for Idera in spite of the small number of patients it may help.

Of course, before that can happen, IMO-8400 has to prove it's safe and that it works. Investors should gain insight into that when Idera rolls out data for WM patients and for diffuse B-cell lymphoma patients in the fourth quarter and next year, respectively.

Tempering enthusiasm
Before getting too excited about the potential opportunity associated with drugs from Agenus, Array, and Idera, remember that 93% of oncology drugs entering clinical trials fail and that up to 40% of drugs in late-stage trials fall short. That suggests the odds remain stacked against these companies reporting positive results from their trials.

Because none of these companies has a product on the market or generates revenue outside of collaborations yet, they're extremely risky and that could mean that it's best to wait and see how their trial results stack up before buying shares in any of them. 

Todd Campbell has no position in any stocks mentioned. Todd owns E.B. Capital Markets, LLC. E.B. Capital's client may have positions in the companies mentioned.  The Motley Fool recommends GlaxoSmithKline. Try any of our Foolish newsletter services free for 30 days. We Fools may not 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.