A cure for cancer is the most desirable statement for scientists and investors alike. However, optimism is often met with disappointment as the task of curing cancer is no easy feat. Despite the difficulty, the scientific world continues to develop drug after drug in an attempt to eradicate the horrific group of diseases.
Despite a cancer cure being slim to none, investors must keep their eyes peeled for up and coming cancer pharmaceuticals. Because, when the biotech releases positive trial results, the stock erupts like a volcano. Hence why Mersena Therapeutics (NASDAQ: MRSN) is exploding today after releasing positive cancer results.
Why is Mersena Therapeutics surging higher today?
Meresena’s cancer drug XMT-1536 showed preliminary signs of interim safety, tolerability, and efficacy in its phase 1 clinical trial. MRSN, through XMT-1536, strives to cure patients suffering from ovarian and non-small lung cell cancer. The preliminary data showed a controlled disease rate of 80% and an objective response rate of 35% in ovarian cancer patients. However, the company needs more data to analyse the antitumor results from lung cancer patients properly.
A cure for these two types of cancer remains an unmet need in the scientific area. Thus, it should come as no surprise that positive safety efficacy results triggered extreme bullish activity.
Are phase 1 results noteworthy?
Phase 1 trial results are designed to test the safety of the drug but not how efficacious it is. Hence, phase 1 trials are easier to overcome than phase 2. Therefore, investors must understand phase 2, and 3 trials are the real test of the drug’s efficacy.
Nonetheless positive phase 1 trials is an encouraging signal in the hope that Mersena can report more mature data during H2 2020.
Do positive Cancer results make Mersana worth the investment?
Before I start, I am obliged to remind our viewers that this is not advice only general commentary from my extensive research in this area.
Short answer: Yes but patience is a virtue
If you got in before the announcement congratulations, you just scored some significant gains. However, if you did not take a step back. Greed will likely infiltrate your mind and try to convince you the stock will continue to rise. However, most of the, time the extreme bullish activity occurs in the pre-market or first minutes of trading.(opinion not advice)
Investors continuously pump and dump biotechs. Just look a COVID-19 vaccine runner Moderna (NASDAQ:MRNA). Sometimes a biotech will sustain its momentum after surging off an announcement, but it’s rare. Hence, if you invest off the morning rise, its a pure guessing game whether it will go up or down. If I were investing in MRSN, I would invest off the sell-off and try to capitalise on a re-injection of investor optimism. (opinion not advice) However, if the stock fell further I would load up more on the decline with the intention to cash in on complete phase 1 and upcoming phase 2 trials.(opinion not advice)
If you are interested in cancer pharmaceuticals, then check out Imugene (ASX:IMU). The Aussie biotech holds not 1 but 4 drugs/treatments relating to cancer. Ultimately, increasing the chances of price-sensitive announcements.
The information above should not be taken as financial advice. Youth Investment Group has no liability for personal financial interests or investment decisions. You should make your own investment decisions based upon your own research and what you believe is best for you.
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Written by Patrick Mcloughlin, Senior Manager of YIG.