ADAP soars 150% on positive Phase 1 cancer trials – is a sell-off inevitable?

Why did the ADAP surge this week?

Adaptimmune Therapeutics PLC (Nasdaq: ADAP) skyrocketed 128% on Friday. Investors rallied behind ADAP because of their positive phase 1 cancer trial. ADAP’s synovial sarcoma cancer candidate (ADP-A2M4) reported a 50% response rate in patients suffering from lung, head, and neck cancers. The phase 1 trial confirmed the safeness, durability, and responsiveness in ADP-A2M4.

Synovial sarcoma is a rare cancer. Especially as only 1 to 3 people in a million individuals sadly suffer from this disease. Thus, a viable cure of Synovial sarcoma is a current unmet need in the scientific world.

Adaptimmune Therapeutics now plans to submit its SPEAR T-cell therapy for approval to treat cancer patients based on data from a trial. ADAP are also planning to begin a Phase II trial of their T-cell therapy early next year.

History of ADAP

Adaptimmune’s IPO was back in 2015. The biotech is a leader in T-cell therapy with three ongoing clinical trials. Adaptimmune’s SPEAR (Specific Peptide Enhanced Affinity Receptor) aims to create T-cells to target and destroy cancer, including solid tumours.

Is ADAP 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 surprisingly (opinion not advice)

ADAP’s market activity is bucking the trend when it comes to the usual aftermath of biotech cataylsts. Phase I, II, III, and FDA approvals often cause the biotech to erupt like a volcano and then subside moments later. ADAP erupted like a volcano after positive phase I trials. However, the lava is still spurting out as ADAP continued to rise on Friday. Mainly because ADAP is targeting an unmet need. Positive results injected optimism into investors that Adaptimmune could hold the key to cure the rare cancer that is Synovial sarcoma. 

However, it is early stages. Plus phase I trials aim to test the safety of the drug, which is relatively overcome. I do expect a sell-off as the extra gains made on Friday probably surprised Thursday investors. Also, when biotechs stop posting PSE’s then the stock naturally dips as investors look to reallocate their funds. Hence, I was investing I would be looking for a sell-off, possibly on Monday or Tuesday.

Furthermore, ADAP does not have any commercialized products yet. Thus, keep that in mind when investing. Because it seems all investor hopes rests on their Synovial cancer drug. ADAP is aiming for a commercial launch in 2022, giving room for investors for a possible long-term gain.

The information above is not 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 Jaewon Jung, Associate of YIG.