Kezar Life Sciences (NASDAQ:KZR) stock is up an astounding 74% today after the biotechnology company reported positive results from its clinical trial regarding a treatment for the autoimmune disease Lupus.
In a news release, Kezar reported positive results from a Phase 2 clinical trial evaluating “Zetomipzomib,” its immunoproteasome inhibitor that’s designed to lessen the severity of symptoms caused by Lupus, an autoimmune disease that causes inflammation in organs such as the heart, lungs, kidneys, and brain. The positive trial results move Kezar closer to getting approval for its Lupus treatment from the U.S. Food and Drug Administration (FDA) and being able to make the medication commercially available.
Even with today’s big move higher, KZR stock remains down 36% year-to-date at $10.08 a share.
In its news release, Kezar’s chief medical officer, Dr. Noreen R. Henig, said:
The Phase 2 topline results show a clinically meaningful overall renal response to Zetomipzomib after six months, without high-dose induction therapy. Patients in the trial also experienced reductions in extra-renal manifestations of lupus. Zetomipzomib appears to be immunomodulatory, well-tolerated and steroid-sparing – all important attributes for patients with autoimmune disease who are often young and active.
The company added that, based on the positive Phase 2 clinical trial results, it plans to continue developing Zetomipzomib for patients with Lupus and move forward to commercialization of the treatment. Zetomipzomib is one of only two medical treatments that Kezar Life Sciences currently has in its development pipeline. The other drug candidate that the company is developing is a treatment for cancer tumors called “KZR-261.” Neither drug candidate has been approved by the FDA.
Why It Matters
The Phase 2 clinical trial results provide a vote of confidence in Kezar Life Sciences and indicate that the company is on the right path with development of its Lupus treatment. Investors are taking the trial results as evidence that Kezar’s Zetomipzomib could eventually be approved to treat Lupus and become commercially available. This would boost the small biotech company’s sales and leading it to profitability.
However, while the Phase 2 trial results are encouraging, Kezar Life Sciences still has a lot of work to do to get the treatment cleared by the FDA and begin commercial sales. FDA approval is by no means guaranteed. The company and its medication could encounter future problems along the development pathway.
What’s Next for KZR Stock
Investors who held KZR shares yesterday are no doubt ecstatic to see the stock jump more than 70% today. However, any enthusiasm should be tempered by the fact that Kezar’s Lupus treatment has still not been approved by the FDA. While passing a Phase 2 clinical trial is an important step, it is one of many steps on the road to commercialization.
On the date of publication, Joel Baglole 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.