Investors can’t get enough of Dyax Corp. (NASDAQ:DYAX) stock today; shares are up an incredible 50in morning trading.
The surge comes after better-than-expected data from its phase 1b clinical trial of DX-2930, a drug designed to prevent hereditary angiodema (HAE) attacks. HAE attacks are rare, affecting only about 1 in 10,000 to 1 in 50,000 people. But while uncommon, when HAE strikes, it can be fatal.
In its efforts to develop a preventive HAE drug, DYAX targeted “orphan drug” status — a status that typically is given to drugs treating a rare disease and that helps speed these products to market.
And because these diseases are rare, orphan drugs usually cost patients a small fortune.
2000-Level Highs
The DYAX stock price is now hitting levels shareholders haven’t seen since the year 2000. Before today’s rally, DYAX stock already was walloping the market, boasting a near-doubler in the past 52 weeks alone. That sort of performance makes the Nasdaq’s 14% return in the last year look paltry by comparison.
Wall Street is going even crazier for DYAX stock today for a few reasons:
- The data was really, really good.
- The data was so good that the Food and Drug Administration fast-tracked DX-2930 for HAE, allowing Dyax to move swiftly on to later clinical stages.
- Several prominent Wall Street research firms quickly and aggressively raised their price targets. Oppenheimer boosted its boosted its stock price target for DYAX from $14 to $26 per share, while RBC Capital markets hiked its target price from $18 to $31 per share. Both firms maintain DYAX stock as an “outperform.”
In the study, DX-2930 saw encouraging results, as no patients exhibited meaningful problems as a result of the drug, there was no indication of toxicity, and no patients quit the trial. Dyax’s chief medical officer summed up the Phase 1b success:
“The study met all of its primary objectives, and notably, DX-2930 also demonstrated statistically significant reductions in attack rate compared to placebo, an important characteristic for a prophylactic treatment.”
But before we get ahead of ourselves, let’s pause for a minute and take a step back.
The fact of the matter is DX-2930 remains in development, and it’s got a ways to go before being officially FDA approved. Once (if) that happens, Dyax will need to arrange for the production and marketing of this drug after setting a price for it, and no one knows what that could feasibly be.
Insurance reimbursement rates will need to be established, and those could end up being unfavorable as well.
The bottom line is that a number of unknowns are swirling around DYAX stock. If you weren’t in before today’s big pop, don’t count any chickens before they hatch.
As of this writing, John Divine did not hold a position in any of the aforementioned securities. You can follow him on Twitter at @divinebizkid or email him at editor@investorplace.com.
