Seattle, WA-based development-stage biotech company PhaseRx, Inc.’s shares skyrocketed almost 150% after the company announced that its lead pipeline candidate, PRX-OTC, has received Orphan Drug status from the FDA for the treatment of ornithine transcarbamylase deficiency (OTCD). Although shares tanked 20.6% in the subsequent trading session, the stock has gained an impressive 98.2% since the announcement.
PhaseRx started trading on the NASDAQ in May 2016. Since then, though, the company’s stock price has fallen 55.4%, compared to the Zacks categorized Medical/Biomedical Genetics industry. However, PhaseRx saw a 101.8% surge in its share price, compared to the Zacks classified Medical/Biomedical Genetics industry, following the election results.
PHASERX INC Price
We note that the FDA usually grants Orphan Drug status to those drugs and biologics that are being developed for the treatment of rare diseases affecting less than 200,000 patients in the U.S. On receiving the status, the company developing it is entitled to various incentives, including assistance on the clinical study design, tax credits for qualified clinical trials costs, exemptions from certain FDA application fees, and seven years of market exclusivity upon regulatory approval.
PhaseRx plans to file an investigational new drug application for PRX-OTC by the end of 2017 and commence a study on the candidate in 2018.
We are encouraged by the FDA granting Orphan Drug status to PRX-OTC. Per the company’s press release, OTCD is a rare liver disorder diagnosed between birth and the age of 12 years. It is caused by an inherited single-gene deficiency that results in hyperammonemia (elevated ammonia in the blood), and can lead to devastating consequences, including cumulative and irreversible neurological impairment, coma and death.
Currently available treatments can neither cure the disease nor eradicate the risk of life-threatening crises. Although PRX-OTC has a long way to go before hitting the market, successful development and subsequent approval could provide an important treatment options for the eligible patient population.
Note that PRX-OTC is the first of three candidates to be developed on the company’s Hybrid mRNA Technology platform. Other early-stage candidates in its pipeline include PRX-ASL for the treatment of argininosuccinate lyase deficiency and PRX-ASS1 for argininosuccinate synthetase deficiency.
Zacks Rank & Key Picks
PhaseRx currently carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the health care sector include Sucampo Pharmaceuticals, Inc. , Vanda Pharmaceuticals, Inc. (VNDA - Free Report) and Anika Therapeutics Inc. (ANIK - Free Report) . While Sucampo and Vanda sport a Zacks Rank #1 (Strong Buy), Anika carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Sucampo’s earnings estimates increased from $1.03 to $1.22 for 2016 and from $1.30 to $1.58 for 2017 over the last 60 days. The company posted a positive surprise in all of the four trailing quarters with an average beat of 35.55%.
Vanda’s loss estimates narrowed from 68 cents to 52 cents for 2016, while its earnings estimates increased from 16 cents to 22 cents for 2017 over the last 60 days. The company posted a positive earnings surprise in three of the four trailing quarters with an average beat of 56.65%. Its share price has surged almost 81% year to date.
Anika’s earnings estimates increased from $1.96 to $2.06 for 2016 and from $2.03 to $2.09 for 2017 over the last 60 days. The company posted a positive surprise in all of the four trailing quarters with an average beat of 33.14%. Its share price has gained approximately 21% year to date.
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