What happened

After updating data from its ongoing phase 2 trial of IDO-inhibitor indoximod in advanced melanoma, shares in NewLink Genetics Corporation (NASDAQ:NLNK) shares are jumping 45% at 12:15 p.m. EDT Thursday.

So what

NewLink Genetics' IDO-inhibiting cancer drug pipeline was dealt blows earlier this summer when a mid-stage trial of indoximod in breast cancer patients failed and Roche Holdings returned the rights to GDC-0919, a second-generation IDO-inhibitor. The disappointments caused NewLink Genetics' shares to lose almost half of their value.

Researchers work together in a laboratory.

Image source: Getty Images.

On Thursday, shares are winning back some lost ground following the release of updated data from a trial evaluating the use of indoximod alongside the PD-1 checkpoint inhibitor, Keytruda, in advanced melanoma patients.

NewLink Genetics thinks that combining indoximod with PD-1 drugs can deliver even better outcomes for patients because IDO-inhibitors prevent cancer cells from hijacking proteins that suppress immune system responses, and PD-1 drugs improve the ability of T-cells to spot and destroy cancer cells.

This thinking appears to be on target given the latest study data improves upon previously reported trial results. The new results show a complete response rate of 20% to indoximod plus Keytruda therapy, up from 12% previously. Also, the overall response rate to the approach is 61% and the disease control rate, which includes patients with stable disease, is 80%.

Now what

The data suggests that adding indoximod to PD-1 therapy can improve outcomes for advanced melanoma patients, however, the efficacy and safety of this combination will need to be confirmed in a much larger phase 3 trial. NewLink Genetics hopes to fully enroll such a trial by the end of 2018, so it will be a while before we know for sure that this approach works.

I do believe that there's potential for IDO-inhibition to become a part of standard care in cancer patients, but investors should keep in mind that NewLink Genetics isn't the only company developing IDO-inhibitors. In fact, Incyte Corp is also in the hunt, and its timeline to the FDA appears to be shorter than NewLink Genetics.