ObsEva (NASDAQ:OBSV) stock is on the move this morning after the Swiss biopharma reported positive results from trials of its Yselty treatment for uterine fibroids. OBSV stock was up 5.65% in pre-market trading; the company’s Swiss-traded shares were up 7.57% as of 1 p.m. local time.
Yselty (linzagolix) is the company’s leading drug candidate, developed for the treatment of women with heavy menstrual bleeding due to uterine fibroids and pain associated with endometriosis. ObsEva licensed linzagolix from Japan’s Kissei (OTCMKTS:KSPHF) in late 2015 and retains worldwide commercial rights, excluding Asia, for the product.
Fibroids are noncancerous tumors that grow in or on the uterus. More than 80% of Black women and about 70% of White women develop fibroids by the time they reach menopause. Black women develop earlier onset fibroids that tend to become larger and more numerous as compared with other women, according to the Society for Women’s Health Research.
“The completion of the (Phase 3) PRIMROSE 1 (U.S. only) and PRIMROSE 2 (Europe and U.S.) clinical studies is a major achievement for the company,” said Brian O’Callaghan, CEO of ObsEva. “This milestone represents the next critical step in bringing Yselty forward as a well-differentiated, once daily oral GnRH antagonist with unique dosing options designed to treat more women with uterine fibroids. Our EU MAA review is ongoing and we continue to prepare for our US NDA submission in Q3 2021. We look forward to providing updates on our progress and sharing additional efficacy and safety data, which will be submitted for presentation at upcoming scientific conferences this year.”
OBSV Stock: Yselty Treatment Would Compete With AbbVie
The ObsEva results come nearly a year after the U.S. Food and Drug Administration (FDA) approved the first non-surgical, oral medication option for this condition in premenopausal women. That treatment was developed by AbbVie (NYSE:ABBV) and Neurocrine Biosciences (NASDAQ:NBIX).
OBSV stock carries a market capitalization less than $250 million. As a clinical-stage biopharma company, its products have yet to be approved or proven. As such, investors are taking a leap of faith of sorts with this stock and its ilk.
To be sure, many of these stocks are “lottery ticket-like” in nature. They trade almost as options would, and provide massive upside potential, along with serious downside potential. If clinical trials don’t go well, or catalysts don’t materialize, these stocks have the potential to return to their penny status quickly.
Investors should be very careful with their position sizing and diversification with respect to these stocks. Spreading one’s bets across a number of high-quality penny stocks is one strategy. Ensuring that the one 10,000% winner offsets all the losses from the 90% of positions that are zeros (or close to it) is important.
On the date of publication, Robert Lakin did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
InvestorPlace contributor Robert Lakin is a veteran financial writer and editor, including previous stints with Bloomberg News and as a buyside equity research editor.
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