Amid another soft session on Wall Street, Sera Prognostics (NASDAQ:SERA) — a specialist in the field of maternal and neonatal health — shook up the market with a dramatic increase in value. Fueling the blistering ride was encouraging data for its clinical study regarding risk assessment of premature delivery. Subsequently, researchers will now focus on analyzing the data, boosting SERA stock well into triple-digit-percentage territory.
According to the accompanying press release, Sera announced that the Data Safety Monitoring Board (DSMB) — an independent group of experts that monitor clinical trials for participant safety and data validity — recommended that the health specialist stop enrollment to its Prematurity Risk Assessment Combined with Clinical Interventions for Improved Neonatal Outcomes (PRIME) study due to efficacy.
Specifically, the DSMB stated that either of the co-primary endpoints met the stopping criteria for statistical significant at the pre-planned interim analysis. Unsurprisingly, Sera adopted the recommendation.
As Sera Prognostics President and CEO Zhenya Lindgardt stated, “[i]t is unexpected for trials to stop early for efficacy since most statistical power is typically reserved for the final analysis, which makes this event that much more encouraging. We look forward to sharing top-line results once we have had a chance to analyze the interim look data.”
SERA Stock Drives Sharply Higher on the Positive Implications
Naturally, SERA stock responded robustly from the encouraging print. After popping higher in March of this year, the company suffered a steady deterioration of equity erosion. However, in one shot, it jumped 260%, though it did trim some of this return in the late morning hours.
Further, the DSMB oversees trials with the primary focus of protecting human participants. Therefore, this oversight group tends to err on the side of caution when it comes to halting trials. To Lindgardt’s point, it’s relatively rare for the DSMB to recommend stopping a study for efficacy. This too contributed to the stratospheric rise of SERA stock.
In addition, the underlying PRIME study ultimately serves a significant need. According to Sera’s press release:
“Preterm birth is defined as any birth before 37 weeks’ gestation and is the leading cause of illness and death in newborns. The 2022 March of Dimes Report Card shows that, for the last four consecutive years, more than one in ten infants is born prematurely.”
Further, prematurity associated with a significant increased risk of major long-term medical complications, resulting in significant costs. Experts in the field estimate the annual healthcare costs to manage these short and long-term complications to be about $25 billion for 2016.
Why It Matters
Within the last three months, only one analyst covers SERA stock, TD Cowen’s Daniel Brennan. However, the expert did not specify a price target. Nevertheless, Sera remains a speculative enterprise, featuring a time-of-writing market capitalization of under $224 million.
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.
