Today, Xenon Pharmaceuticals (NASDAQ:XENE) is among the big movers in the market. Currently, shares of XENE stock are more than 80% higher. This move comes after a wild morning session that saw shares of this clinical-stage biotech nearly double.
Indeed, as with many clinical-stage biotech stocks, such moves can be expected. However, when these moves occur, it’s typically an indication that some sort of major announcement has come down. Such is the case with Xenon today.
Let’s dive into what Xenon announced and why this is big news for investors in XENE stock.
XENE Stock Higher on Positive Clinical Trial Results
As can be expected, positive clinical trial results for one of the company’s key drugs was the driver of today’s move in XENE stock. The company announced some very positive mid-stage results for its XEN1101 drug. This drug treats patients with focal epilepsy.
The results posted by Xenon were statistically significant, and meaningful improvements compared to the placebo suggests that this drug works. That’s good news.
Indeed, the growing need for better epilepsy-focused drugs in the market has made biotech plays such as XENE stock hot commodities of late. This is a company that’s operating in an otherwise competitive field. However, should Xenon be first to market with this new focal epilepsy treatment, the company’s growth potential could be immense.
As the company points out in its press release, “Many patients today are living with the debilitating impacts of focal seizures, even while taking multiple anti-seizure medications, so there is a substantial need for new, efficacious and well-tolerated therapies.”
Indeed, should Xenon’s drug be approved, investors stand to potentially benefit in a big way. The attractiveness of XENE stock as a potential homerun may entice many aggressive growth investors. However, it’s always worth pointing out that these hypergrowth stocks carry higher-than-average levels of risk. Therefore, investors ought to remember to prudently size such positions in a well-diversified portfolio.
On the date of publication, Chris MacDonald 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.