Crinetica Pharmaceutical products (CRNX) said Monday that its pill was successful in a study of people with growth hormone disorder, and biotech stocks soared on the news.
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During afternoon trading on the stock market today, Crinetics shares shot up 63% to 26.06. Earlier in the session, CRNX shares rose as much as 84% to 29.44. That put the shares at their highest since January 2019. The move also reversed a four-day decline for biotech stocks.
The company studied its drug, called paltusotine, in patients with acromegaly. In this condition, patients produce too much of a specific growth hormone.
Crinetics tested the daily pill in patients whose hormones were well controlled with standard injections. After 36 weeks, 83% of patients taking paltusotine maintained controlled hormone levels, compared to only 4% of patients taking a placebo. The company is conducting a second Phase 3 study that could help it gain approval in early 2024, CEO Scott Struthers said in a written statement.
Leerink Partners analyst Joseph Schwartz noted that Crinetics is studying paltusotine in a number of other diseases. The company also has a burgeoning early-stage pipeline that should pique investor interest in biotech stocks.
“The positive data reinforces for us that Crinetics has a strong clinical development team in addition to their chemistry/biology expertise,” he said in a report. He says the results bode well for the upcoming second Phase 3 trial scheduled to take place next year.
Biotech Stocks: Switching from Injections to Pills
Traditionally, patients with acromegaly receive semi-regular injections to control the excess growth hormone produced. In the Crinetics study, patients switched from injections under the skin – where their disease was well controlled – to paltusotine.
Criticians said paltusotine was well tolerated without serious side effects. However, all paltusotine recipients had at least one side effect. The most common were joint pain, headache, diarrhea, stomach pain and nausea. It’s bullish for the biotech sector: 30% of patients taking paltusotine had side effects that doctors said were related to acromegaly, compared to 86% of placebo patients.
“We designed paltusotine to be the preferred therapeutic option for people with acromegaly,” said CEO Struthers.
Despite the turnaround, Crinetics biotech stock remains cheaply valued with a poor IBD Digital Relative Strength Rating of 19. This means shares are in the bottom 19% of all stocks when it comes to 12-month performance.
Follow Allison Gatlin on X, the platform formerly known as Twitter, at @IBD_AGatlin.
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