Shares of Mirati Therapeutics rocketed Wednesday after a lung-cancer drug regimen paired with Merck's blockbuster medication Keytruda proved more effective than using Keytruda by itself. MRTX stock jumped more than 30% in morning trades.
The news came during a bevy of news updates from Mirati. The biotech company narrowly beat June-quarter expectations. It also announced a $300 million public offering and the departure of Chief Executive David Meeks.
Meeks will stay on as a consultant through Oct. 15. In the meantime, former CEO, president and founder Charles Baum will act as the interim CEO.
In early trading on today's stock market, MRTX stock charged 33.1% ahead, ending the regular session at 37.
MRTX Stock: Mixed Lung Cancer Results
While the lung cancer tests boosted MRTX stock, they proved to be mixed.
Mirati tested a combination of its drug, adagrasib and Merck's Keytruda in patients with high levels of a protein called PD-L1 in their tumors. Tumor cells can use that protein to hide from the immune system.
Keytruda binds to the protein, unveiling the tumor cells to the immune system. So, drugs in this class tend to work better in patients with a higher level of PD-L1 in their tumor cells.
But adagrasib, which sells under the brand name Krazati, blocks another protein known to drive cancer.
Nearly two-thirds of patients with high levels of PD-L1 — 63% — responded to the combination, Mirati said in a presentation. That's far better than Keytruda alone, which leads to a 39% to 45% response rate. Mirati is now planning to begin a final-phase study before the end of the year.
Bearishly for MRTX stock, though, the results were less promising in patients with lower levels of PD-L1. The regimen doesn't appear likely to outperform the standard treatment, a combination of immunotherapy and chemotherapy.
Instead, Mirati is adding adagrasib to standard drugs. It hopes to make a decision on whether to move that regimen forward into late-stage testing in the first half of 2024.
10% Of All Cancers
The company also unveiled promising results for a drug called MRTX1719. It has the potential to treat a genetic defect associated with about 10% of all cancers, including lung, pancreatic and mesothelioma.
A third of patients partially responded to Mirati's treatment. Needham analyst Ami Fadia noted the first generation of drugs in this class generally had lower, single-digit response rates. Further, they were toxic in the blood, limiting how much of the drug patients could receive. Mirati didn't find any dose-limiting toxicities at higher doses.
"We believe the stock may start to get credit for MRTX1719, and overall we think the stock trades up today," she said in a note to clients.
Fadia has a hold rating on MRTX stock.
But Evercore ISI analysts Umer Raffat and Jonathan Miller noted one patient ended treatment due to liver toxicity while another dropped out of the study due to fatigue. Other patients had interruptions in treatment due to nausea and vomiting.
"Safety will be critical for these second-generation (drugs) given the scrutiny on first-generation molecules," they said. They have an outperform rating on MRTX stock.
Follow Allison Gatlin on Twitter at @IBD_AGatlin.
