Demonstrating the positive side of the occasional feast-or-famine nature of publicly traded biotechnology firms, Cytokinetics (NASDAQ:CYTK) soared Wednesday following the disclosure of its positive late-stage clinical trial data. A specialist in the field of muscle activators and inhibitors, Cytokinetics’ heart failure drug met its main target. Subsequently, CYTK stock initially popped 70% higher before adding to the robust return.
According to a Bloomberg report, the therapeutic in question — a once-daily pill called Aficamten — addresses hypertrophic cardiomyopathy (HCM), a genetic disease in which abnormally thick heart muscle interferes with pumping. Citing information from the American Heart Association, as many as one in 500 people have the condition, though it often goes undiagnosed.
Notably, the drug improved exercise capacity and oxygen uptake in HCM patients, the main goal of the clinical trial. The trial occurred for 24 weeks against a placebo treatment. Even better, Reuters pointed out that Cytokinetics’ offering stacks favorably against a rival treatment from Bristol Myers Squibb (NYSE:BMY).
Under the study, peak oxygen capacity — measured in milliliters per minute per kilogram of body weight — improved by 1.74 points on average. That contrasts to the 1.4-point improvement that Bristol’s Camzyos drug generated. Coincidentally, while CYTK stock went vertically northward, BMY traded slightly below parity in the afternoon session.
Takeover Interest Spikes for CYTK Stock
Unsurprisingly, analysts took great encouragement at the latest news, calling the late-stage data a “home run.” Specifically, Oppenheimer analyst Justin Kim remarked that the success of CYTK stock and the study are “inextricably linked” at this point. Further, the expert declared that Aficamten could contribute about $2 billion in peak U.S. sales.
Interestingly, that forecast might be on the conservative end. Prior to the data being released, analysts from Leerink Partners stated that Aficamten could generate $3 billion in peak sales by 2035. Either way, CYTK stock featured a market value of more than $4.4 billion prior to the clinical trial results. At the moment, this statistic stands at just over $8 billion.
Moving forward, Cytokinetics plans to seeking marketing approval for the drug in the U.S. and Europe in the second half of next year to treat HCM. In addition to the muscles becoming stiff, the condition can also cause cardiac arrest. Further, medical experts regard HCM as the most common cause of sudden cardiac death in young people and competitive athletes.
Adding to the positive sentiment, months before the disclosure of the trial results, Cytokinetics had already attracted interest from at least one major drugmaker, according to Bloomberg. And last week, CYTK stock popped higher as a report emerged that the biotech firm was fielding takeover interest from Novartis (NYSE:NVS) and AstraZeneca (NASDAQ:AZN).
Why It Matters
Currently, analysts covering CYTK stock within the past three months rate shares a consensus strong buy. This assessment breaks down as 13 buys, one hold and zero sells. However, the average price target of $61.07 is “outdated” due to the dramatic pop today. JPM Securities’ Jason Butler anticipates CYTK hitting $110 per share, translating to roughly 36% upside.
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.
