Shares of SpringWorks Therapeutics rocketed Tuesday after U.S. regulators signed off on its new cancer treatment, Ogsiveo. SWTX stock retook its key moving averages in high volume.
Ogsiveo is the first and only treatment for desmoid tumors, locally-aggressive tumors that impact soft tissue. Though they don't spread throughout the body, desmoid tumors usually don't respond to existing off-label treatments. Desmoid tumors can be surgically removed, but they come back in more than three-quarters of patients, according to SpringWorks.
Wedbush analyst David Nierengarten expects Ogsiveo to become the standard of care for patients with this form of cancer. In a key study, patients who took Ogsiveo were 71% less likely to experience cancer progression than placebo recipients. Further, the Food and Drug Administration signed off on Ogsiveo without a black box warning, a program to mitigate risks and no contraindications.
"These comparisons, in addition to the inclusion of patient-reported outcome of improvement in worst pain in the label, give us increased conviction that the majority of physicians will choose to prescribe Ogsiveo," Nierengarten said in a report.
SWTX stock soared 18.7% to 24.65 on today's stock market. SpringWorks stock rose above its 50-day moving average and briefly topped its 200-day line, according to MarketSmith.com.
SWTX Stock: 'A Watershed Moment'
SpringWorks Chief Executive Saqib Islam called the approval a "watershed moment" for patients with desmoid tumors.
"This community has been waiting for an effective treatment that not only shrinks their tumors but also significantly improves pain, which is the most debilitating symptom reported by people living with desmoid tumors," he said in a written statement.
Ogsiveo will go for a wholesale acquisition price of $29,000, which doesn't include discounts. That's far above the $19,000 Nierengarten originally projected. The company is planning to target the top 1,500 prescribers at high-volume cancer cancers.
Nierengarten kept his outperform rating and 45 price target on SWTX stock.
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