PaxMedica (NASDAQ:PXMD) stock is jumping significantly higher against the backdrop of another soft session on Wall Street. This morning, management announced a productive discussion with the U.S. Food and Drug Administration (FDA) over positive clinical trial results for a key drug. Subsequently, PXMD stock is soaring on the implications of possible forward progress.
According to a press release, PaxMedica completed a type-B meeting with the FDA regarding its PAX-HAT-301 study of “suramin in Stage One Human African Sleeping Sickness caused by Trypanosoma brucei rhodesiense.” Per the FDA’s website, such discussions may involve risk evaluation and mitigation strategies (REMS) prior to an enterprise filing for a New Drug Application (NDA). Such meetings discuss the overall development program to help guide and clarify safety and efficacy frameworks.
From PaxMedica’s point of view, the firm stated that it received “constructive feedback” from the FDA related to its NDA. The company expects to file its application in the second half of 2024.
PXMD Stock Rises on Breakthrough Implications
At one point, shares of PXMD stock jumped as high as 37 cents per share today. However, as the early afternoon session has worn on, shares have given up a significant chunk of those gains, demonstrating the volatile nature of this clinical-stage biopharma. Nevertheless, after struggling badly since its initial public offering (IPO), PaxMedica is finally offering investors some encouragement. As of this writing, shares are still up by more than 30%.
According to BioSpace, if the FDA approves suramin, the therapeutic will represent the first drug indicated for the treatment of Trypanosoma Brucei Rhodesiense Human African Trypanosomiasis (TBR HAT) in the United States. Additionally, under the aforementioned scenario, PaxMedica could potentially qualify to receive a priority review voucher (PRV) under the Neglected Rare Tropical Disease Program.
Per the World Health Organization, protozoan parasites transmitted by infected tsetse flies cause Human African Trypanosomiasis. Further, the WHO states that HAT mainly threatens populations of remote rural areas with limited health services. Worryingly, when left untreated, the mortality rate of this disease is close to 100%. Therefore, it’s vital that the scientific community addresses this underserved need.
Fundamentally, if PaxMedica achieves forward clinical progress for PAX-101, it could potentially provide a breakthrough for this affliction. Still, investors will want to be careful with PXMD stock as it remains an extremely speculative idea.
Why It Matters
According to TipRanks, no analysts currently cover PXMD stock, which isn’t surprising. Since the start of the year, shares have lost 88% of equity value (including today’s gain). Gurufocus also notes that the firm is a pre-revenue enterprise, heightening the risk-reward profile. Lastly, PaxMedica only carries a market capitalization of $4 million, thus warranting extreme caution.
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On the date of publication, Josh Enomoto 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.
