Shares of ArQule (NASDAQ: ARQL) rose more than 53% last month, according to data provided by S&P Global Market Intelligence . The clinical-stage pharmaceutical company reported promising data from two early-stage clinical trials. ARQ 531 flashed its potential to treat a range of cancers affecting white blood cells that have stubbornly resisted other treatments, while ARQ 092 demonstrated promise in treating rare overgrowth diseases.
Management wisely took advantage of the highest stock price since the early 2000s to raise capital through a public stock offering. Surprisingly, despite the dilution, Wall Street sent shares even higher on that news . The offering could raise up to $103.5 million in gross proceeds, which is a nice chunk of change considering ArQule ended March with $92 million in cash on hand.
Image source: Getty Images.
There’s no denying June was a great month for the business. The early results from ARQ 531 suggest that the company’s approach has merit. The drug candidate is a reversible inhibitor of a protein called BTK, which is commonly expressed in white blood cell cancers such as lymphomas and leukemias. The problem is that other treatments bind to the protein permanently, which can cause the cancer to mutate resistance. ARQ 531 might alleviate that risk by letting go of its target, therefore making cancer cells more susceptible to attack for longer periods of time. Four of six patients tested achieved a partial response, including one patient who’s received treatment for two years.
The data from ARQ 092 are also impressive, albeit less so. The drug candidate inhibits a protein called ATK, which causes various overgrowth syndromes and plays a role in some cancers, too. There are currently no approved ATK inhibitors on the market. Couple that with the fact that 9 of the 17 patients had stable disease after one year of treatment, and there’s reason to suspect ArQule could be onto something. However, the endpoints of the next clinical trial (reduction in lesion size) might be more challenging to meet considering only 1 of the 17 patients in the preliminary data met that mark. Investors should probably temper expectations.
Meanwhile, bolstering the balance sheet is generally a solid development for an early-stage pharma company with a maturing pipeline. The business now should have enough capital to get to the stage of data readouts for ARQ 531, ARQ 092, and other drug candidates.
ArQule is now valued at a market cap of $1.3 billion. Considering the company had struggled to top $400 million for much of the last decade, that’s a sign that investors are clearly optimistic about the pipeline’s future. Of course, while clinical results from select early-stage trials were encouraging, investors should remember that there’s a long road ahead.
10 stocks we like better than ArQule
When investing geniuses David and Tom Gardner have a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor , has quadrupled the market.*
David and Tom just revealed what they believe are the ten best stocks for investors to buy right now… and ArQule wasn’t one of them! That’s right — they think these 10 stocks are even better buys.
Go to Appearance > Customize > Subscribe Pop-up to set this up.
Wealth Empire Newsletter
Register now for free updates and alerts
Note: I have the ability to revoke this permission at any time and ask for the removal of my personal data collected by contacting us or simply clicking Unsubscribe.