Jumping significantly in premarket trading this morning, the kind of movement we’re seeing from shares today is an incredible feat for any stock. However, it’s especially eye-catching for Dice Therapeutics. The small San Francisco-based biotech company specializes in treatments for autoimmune and inflammatory diseases like psoriasis.
Prior to today, DICE stock had been down less than 2% on the year and trading at $24.65 per share. Over the past 12 months, it had also risen a slight 3%. However, shares opened 80% higher at $44.18 this morning. As of this writing, they now trade closer to the $37 mark.
What’s Happening With DICE Stock?
In a news release, Dice Therapeutics reported that 43.7% of its high-dose psoriasis patients responded positively to its oral medication during a Phase 1 clinical trial. That compares to just 13.3% of patients in a placebo group whose condition improved during the trial period.
Psoriasis is a skin condition and autoimmune disease that is considered chronic and currently has no cure. More than 7.5 million American adults are believed to be affected by psoriasis, according to data gleaned from the National Health and Nutrition Examination Survey.
Why It Matters
Today’s positive clinical trial results are a major step forward for Dice Therapeutics, which has not yet commercialized any medications in the United States. The conclusion of the Phase 1 clinical trial will enable Dice Therapeutics to now apply to the U.S. Food and Drug Administration (FDA) for use of its psoriasis treatment in the general population. FDA approval could lead to commercial sales of the medication and boost revenue.
Investors are clearly responding positively to news of the trial results. However, any sudden premarket increase of 80% or higher in a stock is incredibly unusual, especially on a day when markets are in the red. There might be more going on with DICE stock than is readily apparent.
Up by about 50% as of this writing, whether DICE can hold onto its massive gains remains to be seen. Investors should keep in mind that, apart from today, the stock has barely moved over the past year. As such, interested traders may want to proceed with caution.
On the date of publication, Joel Baglole did not hold (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.