What: Shares of the clinical-state biotech Advaxis (ADXS) gained over 50% last month, according to data from S&P Global Market Intelligence. The main catalyst behind this monstrous surge was the news that the company's midstage study for its lead immunotherapy candidate in HPV-associated head and neck cancer, axalimogene filolisbac (AXAL), was selected as a late-breaker poster presentation at the American Association for Cancer Research (AACR) Annual Meeting scheduled to take place April 16th - 20th.
In addition, Advaxis reported encouraging results for its canine bone cancer therapy known as ADXS-HER2 that also pushed the biotech's shares higher for the month.
So what: Advaxis' stock, along with most of its peers in the world of cancer immunotherapy, have been getting thumped since the start of 2016. The Loncar Cancer Immunotherapy ETF (CNCR), for instance, has fallen by over 26% from its former highs last year:
The bottom line is that the market seemingly lost its appetite for risky clinical-stage biotechs at the start of the year, especially for those working on unproven therapeutic platforms like Advaxis. So, this recent uptrend in Advaxis' shares may signal the beginning of a sentiment change in the market that would obviously be bolstered by more positive clinical updates -- such as the one expected to come from Advaxis next week at the AACR meeting.
Now what: Advaxis and its collaborators are making remarkable progress in terms of assessing the biotech's listeria-based immunotherapies across a host of indications in both humans and dogs.
Source: Advaxis
Even so, cancer immunotherapy as a whole remains a speculative bet due to its current stage of development and the fact that even big pharmas with their vast resources have recently reported disappointing clinical news for their lead immuno-oncology candidates.
That's why I think investors would be better served by using a diversified vehicle like the Loncar Cancer Immunotherapy ETF to gain exposure to this emerging field -- rather than going with a high-risk/high-reward stock like Advaxis. The Loncar Cancer Immunotherapy ETF provides investors with a compelling mix of immuno-oncology pipelines that should generate substantial returns if this field performs as expected.
Advaxis, on the other hand, is entirely dependent on its novel listeria-based platform to create value for shareholders going forward, making it a particularly high-risk stock. After all, a single negative clinical trial update, or a dreaded clinical-hold, could cause the company's shares to crumble.
