Two weeks ago shares of YM BioSciences (AMEX: YMI) were trading at a high of 1.90 and holding strong as shareholders awaited the company’s update of clinical data related to their Phase II trial for their JAK1 and JAK2 Inhibitor CYT387, their drug designed to reduce spleen size, treat symptoms, and reduce transfusion dependence in patients with myelofibrosis. Oddly enough YMI’s share price hit 1.90 on the same day Incyte announced that the FDA had approved their JAK1 and JAK2 inhibitor Jakafi, becoming the first approved therapy for myelofibrosis.
While news of Incyte’s FDA approval didn’t have much of an effect on YMI’s share price a massive sell off on November 22 ignited a panic among shareholders, dropping the stock to a low of 1.03. The sell off prompted the NYSE AMEX to contact YMI and inquire about the trading activity at which point the company responded that they were not aware of any material corporate developments, including without limitation, any financing activities, which could account for the unusual trading activity.
Obviously something sparked the sell off and rumors began to center on the idea that a large hedge fund was selling their position after being caught short in another drug development company. Once large blocks of shares were seen being sold other shareholders reacted, dumping their position as well until the bleeding could stop at the end of the session. If this was the case then investors who managed to build a position when shares were near their bottom could be in a for a treat as the share price has been building itself back, hitting a high of 1.40 on Wednesday before closing the day at 1.27.
While shares remain well below their 50-day moving average of 1.70 and their 200-day moving average of 2.38 the trading activity has picked up considerably and with YMI presenting clinical data on CYT387 at the American Society of Hematology annual meeting running December 10-13 positive data could send shares skyrocketing.
What shareholders will be holding out hope for is that YMI delivers a strong indication that CYT387 will be an effective treatment for anemia associated with myelofibrosis. The significance of this can’t be understated as it is essentially the defining difference between what YMI is working on and the already approved Jakafi. If the FDA approved Jakafi without its ability to treat anemia then it would stand to reason, given the safety and efficacy reported thus far, that CYT387 would also earn that approval.
It should be noted that FDA approval isn’t exactly around the bend; it could still be years before YMI is able to bring CYT387 to market and while they maintain global commercialization rights there is a long road ahead. That being said most believe that if YMI is able to gain FDA approval then they will hold a significant competitive advantage over Incyte. Patients with myelofibrosis suffer from anemia and if YMI’s CYT387 is capable of treating that then it should be welcomed with open arms.
Another difference between CYT387 and Jakafi is dosing with YMI creating a once-daily dosage while Incyte’s treatment required a twice-daily dosage. Because of the favorable efficacy and safety profile that YMI has seen to date they have determined there to be “substantial dosing flexibility” which company President and CEO Dr. Nick Glover said led to them initiating a Phase II “dose-escalation trial intended to determine the maximum tolerated dose of CYT387 when administered twice-daily at higher doses than previously tested.”
There could be tremendous rewards in the future for shareholders of YMI but right now it will take a level of patience because they are really resting their future on CYT387. While they say they are advancing three products, nimotuzumab, an EGFR-targeting monoclonal antibody; and CYT997, a vascular disrupting agent (VDA) being the other two, the reality is they have scaled back on these other projects to advance their most promising drug.
As the December date draws nearer there should be considerable trading activity surrounding YMI and if they deliver what many are expecting then it shouldn’t comes as any surprise if they blow past their 50-day and 200-day moving averages.