Why ChemoCentryx stock has skyrocketed today

What happened

Actions of ChemoCentryx (NASDAQ: CCXI) jumped 96% on Friday after the biopharmaceutical company received approval from the Food and Drug Administration for its treatment for a rare autoimmune disease.

So what

ChemoCentryx’s orally administered drug, avacopan, will be sold under the brand name Tavneos. It is designed to help treat vasculitis associated with ANCA, a condition in which an overreaction of the immune system leads to inflammation and destruction of small blood vessels that can lead to fatal organ failure.

“Today is a momentous day in the history of ChemoCentryx; the culmination of decades of efforts to bring new hope to patients with this disease and other debilitating and fatal illnesses,” said CEO Thomas Schall in a press release.

Patients and investors alike have applauded the news. “There is a significant unmet need in the treatment of vasculitis associated with ANCA, with current therapies often leading to serious and even fatal side effects and reduced quality of life,” said Joyce Kullman, executive director of the ANCA. Vasculitis Foundation. “We believe that new therapies like Tavneos can provide a better future for these patients.”

Now what

ChemoCentryx owns the commercial rights to Tavneos in the United States, where approximately 9,500 people are expected to be diagnosed with severe forms of vasculitis associated with ANCA. The drug will sell for a wholesale price of up to $ 200,000 per year.

Analysts, in turn, estimate that ChemoCentryx could generate $ 1.3 billion in revenue from Tavneos sales by 2035. A windfall of this magnitude could be huge for the company, which has only recorded $ 21.2 million in revenue over the past year.