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The stock market posted mixed results on Friday morning as investors continued to struggle with offsetting factors in their investment decisions. At 11:45 a.m. EDT, Nasdaq Composite (NASDAQINDEX: ^ IXIC) lagged behind other major benchmarks, falling by about a quarter of a percent.
The biotech industry is well represented on the Nasdaq, and it can be a high risk and very profitable industry for investors. Good news can cause a biotech stock to soar, while disappointment can crush stock prices. Today the Nasdaq provided two great examples of how this can play out, such as ChemoCentryx (NASDAQ: CCXI) and Allogenic therapy (NASDAQ: ALLO) revealed both sides of the coin. Below, we’ll take a closer look at what happened with these two actions.
Image source: Getty Images.
ChemoCentryx wins big win
ChemoCentryx shares had climbed 68% by noon on Friday. The biotech company has announced a key win for its leading treatment candidate.
The Food and Drug Administration has approved ChemoCentryx avacopan for adult patients with severe vasculitis associated with ANCA. In particular, oral treatment will focus on granulomatosis with polyangiitis and microscopic polyangiitis, which are the two main forms of the autoimmune disease.
ChemoCentryx will advance the commercialization of the treatment, which will be branded as Tavenos, to clinicians and patients in the coming weeks. With significant unmet needs in patients with the disease, ChemoCentryx is optimistic that the FDA approval will have a significant impact on its sales.
Even with the big leap, investors still want to see more. With stock reaching over $ 70 a share earlier this year, it will take a lot more for ChemoCentryx to satisfy shareholders who have been patient with its testing process.
Allogene is put on hold
Meanwhile, shares of Allogene Therapeutics had plunged 44% by noon on Friday. The biotech company has received bad news from the FDA, which calls into question much of the bullish thesis behind the title.
On Thursday evening, Allogene announced that the FDA had suspended clinical trials of ALLO-501A, an allogeneic treatment for cancer CAR T. Allogene said that a patient in one of its studies suffered from a chromosomal abnormality. According to the company, the only case involved a patient with transformed stage 4 follicular lymphoma who experienced a series of health problems after the ALLO-501A infusion. Despite a partial response to treatment, the patient’s abnormality nevertheless prompted the FDA’s response.
Allogene is still working to try to move forward. The FDA is reviewing the materials Allogene submitted at the end of its Phase 1 trials, and the company hopes its submissions will lead to a pivotal Phase 2 trial in the near future.
The drop pushed the stock to its worst level since its IPO in 2018. This indicates investor confidence in Allogene’s ability to rebound from this setback, and it highlights the risks associated with the stock market. investment in biotechnology.
This article represents the opinion of the author, who may disagree with the “official” recommendation position of a premium Motley Fool consulting service. We are motley! Challenging an investment thesis – even one of our own – helps us all to think critically about investing and make decisions that help us become smarter, happier, and richer.
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