Ambrx Biopharma is no longer flying under the radar. Instead, AMAM stock has soared 522% this year as enthusiasm grows for its cancer smart bombs.
The company concentrates on antibody drug conjugates, or ADCs. These drugs lock onto specific targets on the outside of cancer cells and deliver a toxic payload to the cancer cells without damaging nearby healthy tissue. The space is gaining refreshed attention following Pfizer's $43 billion plan to acquire Seagen, a notable ADC-focused biotech company.
AMAM stock investors have zeroed in on two Ambrx programs. The company is testing treatments for forms of breast and prostate cancer.
Ambrx Chief Executive Daniel O'Connor says investors are beginning to understand the power of antibody drug conjugates.
"People are really recognizing that (antibody drug conjugates are) an important therapeutic option in development for oncology," he told Investor's Business Daily. "I think there's been a recognition of ADCs more generally, which we've benefited from."
AMAM Stock: Hijacking A Natural Process
Here's how Ambrx's drugs work. In nature, antibodies bind to specific receptors or antigens on the outsides of cells.
Drugmakers have hijacked that process. They can create antibodies that bind to specific targets in the body to block inflammation, prevent cancer from spreading or stop disease-causing proteins. ADC drugmakers take that a step further, attaching chemotherapy to the antibody.
The attachment between the antibody and chemo is the "conjugation" part of "antibody drug conjugate." But the blood can break down that connection and drop off the toxic payload before the antibody finds the cancer cells, O'Connor says. This causes damage to healthy tissue and systemic problems.
Ambrx uses a synthetic amino acid to forge a handle on the antibody. The company believes this forms a stronger link between the two.
Notable Stock Moves For Ambrx
AMAM stock rocketed more than 1,000% on Dec. 9 after Ambrx said 74% of patients in China responded to its breast cancer treatment. In a similar first-phase study, 67% of patients in the U.S. and Australia responded to the experimental drug. The move pulled shares up from penny-stock status.
Ambrx is testing that drug, known as ARX788, in patients who previously worsened following treatment with an ADC jointly made by AstraZeneca and Daiichi-Sankyo, called Enhertu. O'Connor calls the payload attached to ARX788 more potent than the payload attached to Enhertu.
"We believe we can count on the stability of our conjugation," he said.
In early March, an independent data monitoring committee took a peek at blinded study data. Reviewers said the drug led to a statistically significant improvement in progression-free survival. That's how long patients live on treatment before their disease worsens. Ambrx's partner, NovoCodex Biopharmaceuticals, plans to seek approval in China based on the results.
On Feb. 16, AMAM stock gained almost 54% after Ambrx unveiled the first results for its prostate cancer drug in three patients. All three showed at least a 50% reduction in prostate specific antigen, or PSA, which is associated with prostate cancer. Two patients showed a greater than 90% PSA reduction.
In October, Ambrx will provide an update from that prostate cancer treatment program.
"I think people are really starting to understand the importance of conjugation and how Ambrx is differentiated from other companies," O'Connor said.
Highly Rated AMAM Stock
RBC Capital Markets analyst Brian Abrahams says Ambrx could break into the "potentially blockbuster metastatic castration-resistant prostate cancer space." The next data update in October could also give AMAM stock another chance to shine, he said.
The Food and Drug Administration has granted that drug a speedier fast-track designation. This means the FDA believes the drug could provide a substantial improvement over available treatments.
Abrahams, the RBC analyst, also says Ambrx's breast cancer treatment could have "underappreciated prospects and that Ambrx's platform confers portfolio advantages within the emerging ADC space." He initiated coverage of AMAM stock with an outperform rating, but notes it has a speculative risk.
"While shares may no longer be completely under the radar, we see opportunity for additional appreciation," he said in a late July report.
AMAM stock has a perfect Relative Strength Rating of 99, ranking in the top 1% of all stocks when it comes to 12-month performance, according to IBD Digital. However, MarketSmith.com shows Ambrx shares recently sank below their 50-day moving average. Still, shares have soared 522% this year as of Thursday's close.
Follow Allison Gatlin on Twitter at @IBD_AGatlin.
