Market feeling frothy? You might be right

Yesterday saw substantial share price gains for Adaptimmune and Nantkwest on the back of very early results; the latter’s 99% jump is even more remarkable considering that it was triggered by comments made by the chief executive in an interview. Over-the-top reactions to small datasets seem to be relatively frequent at the moment, a phenomenon that can perhaps partly be explained by the advancement of gene therapies, which can generate excitement with responses in only a handful of patients. But some investors have been voicing concerns about a “frothy” or irrational market for some weeks now. Here, Vantage looks at the biggest out-of-the-park share price reactions since the beginning of 2016 that have been attributed to early clinical results. The findings seem to confirm the fears: five of the 10 biggest phase I data-prompted valuation hikes have happened since October. It is surely no coincidence that this is when the latest biotech rally commenced on the Nasdaq biotechnology index. This is far from a rigorous test of market conditions, of course, but it seems that biopharma remains primed to provide investors with a wild ride. The fact that several of these advances proved misplaced should also be noted. 

Jumping the gun? Some huge leaps on phase I data – and where they are now
Company The phase I projects that prompted the rise, and progress since Share price reaction Resulting market cap ($m) Current market cap ($m)
Proteostasis (Oct 2018) Three cystic fibrosis doublets, which have since disappointed. 448% 380 104
Adaptimmune (Jan 2020) Four partial responses from three T-cell-based projects.  200% 420 420
Infinity (Oct 2017) PI3k inhibitor IPI-549, which has since disappointed. 123% 189 68
Applied Genetic Technologies (Jan 2020) Retinitis pigmentosa gene therapy that had been tested in 25 patients; outcome tbd.  123% 169 137
Proqr (Sep 2018) Data in 10 patients treated with gene therapy for Leber’s congenital amaurosis; outcome tbd. 121% 560 417
Mustang Bio (Apr 2019) Data in 10 patients treated with a gene therapy for "bubble boy" disease; outcome tbd. 112% 154 168
Forty Seven (Dec 2019) Anti-CD47 project magrolimab in haematological cancers; further data due YE'20. 111% 1,286 1,510
Nantkwest (Jan 2020) CEO reveals one complete response in 11 pancreatic cancer patients treated with company's NK cell therapy. 91%  669 669
Eloxx (Oct 2019) ELX-02 safety data presented at a cystic fibrosis confererence; phase II data due Q1 2020. 80% 243 303
Arqule (Mar 2019) Single response reported with BTK inhibitor ARQ 531; company subsequently bought by Merck & Co.  67% 593 2,700*
Note: moves that resulted in a market cap gain <$75m excluded. *Merck takeout price. Source: EvaluatePharma. 

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