Shares of clinical-stage precision medicine company Allarity Therapeutics (NASDAQ:ALLR) initially soared to a 60% gain for the midweek session before paring down gains to roughly 30%. Undergirding sentiment was early-stage data evaluating the efficacy of Ixempra — a metastatic breast cancer therapeutic — at multiple sites in Europe. Despite ALLR stock skyrocketing, prospective investors should note the heavy risks involved.
According to Allarity’s press release, initial results from its European Phase 2 clinical trial showed that select prescreened breast cancer patients demonstrated promising signs of clinical benefit. Among the four total cases, one showed tumor shrinkage of 66%, while another showed shrinkage of 59%. Further, one patient experienced 24 weeks of stable disease progression, while another experienced 19 weeks of stable disease.
Originally developed by Bristol-Myers Squibb (NYSE:BMY), Ixempra received approval to treat metastatic breast cancer in the U.S. However, according to MarketWatch, Allarity has exclusive option rights for the development and commercialization of Ixempra in Europe.
Following the disclosure of the European Phase 2 initial data, Allarity Chief Medical Officer Marie Foegh, M.D., stated that the company was enthusiastic about the “promising very early trial results since the observed clinical benefit rate exceeds what has been historically observed” for the Ixempra treatment without utilizing the aforementioned patient selection process.
Further, Foegh expressed optimism that the screening process may help identify breast cancer patients that may benefit from the regimen.
ALLR Stock Rises on Blue-Sky Potential
From MarketWatch, the ultimate objective of Allarity’s Phase 2 trial is to refine the criteria for potential patient response to Ixempra. From there, the biotechnology firm aims to broaden the enrollment of metastatic breast cancer patients who may substantially benefit from this treatment. Naturally, ALLR stock jumped on the underlying blue-sky potential.
According to Strategic Market Research, the metastatic breast cancer treatment market size reached a valuation of $17.13 billion in 2021. Further, experts project that by 2030, the sector may command a value of $41.74 billion. Such a tally would represent a compound annual growth rate (CAGR) of 10.4% between 2021 and 2030. Thus, an effective treatment course may lift Allarity above the competition, bolstering ALLR stock.
Per data from Informa, Phase 2 development remains the largest hurdle in drug development. Only 28.9% of candidates achieve this critical phase transition. Again, Allarity is still in the very early stages of its Phase 2 trial. Nevertheless, the progression of the clinical studies has helped invigorate sentiment for ALLR stock.
Why It Matters
Although ALLR stock has been a highlight amid a soft performance on Wall Street, investors should note the high volatility risk associated with Allarity. For example, just in the trailing one-month period, ALLR finds itself down almost 20%. Since the start of the year, shares plunged almost 98%, a worrying prospect for even the most intrepid contrarians.
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On the date of publication, Josh Enomoto 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.
