Shares of Zai Lab rocketed to a 16-month high Thursday after the Chinese biotech posted "impressive" results for its lung cancer treatment.
The company tested its antibody drug conjugate in patients with small cell lung cancer. Of the 19 who could be evaluated on Oct. 10, 14 — or 74% — responded to the treatment. It's important to note, this includes nine patients whose responses have yet to be confirmed.
"Although early, we view this (effectiveness) favorably when compared with approved options in the SCLC space, including Amgen's Imdelltra, and competitive with other emerging programs at this initial look, " Leerink Partners analyst Jonathan Chang said in a report.
In response, Zai Lab stock soared 14.7% to 33.18. Shares hit their highest point since June 2023.
Zai Lab Plans Additional Testing
Antibody drug conjugates are gaining steam in cancer treatment. Think of these like smart bombs for cancer. They seek out specific targets on tumor cells and then drop off a payload of toxic chemicals, thus reducing the impact on nearby healthy tissue.
Zai Lab holds the global rights to its drug, ZL-1310. It tested the treatment in patients who lung cancer worsened following one prior treatment regimen. Encouragingly, of the 14 patients who responded to the treatment, 13 continued on in the study.
Side effects also appear more limited than most other antibody drug conjugates, Chang said.
Next up, Zai Lab will begin testing new doses and trying to optimize its dosing regimen by year-end and in early 2025.
"As the trial continues, we believe confirmation of the responses and durability of responses will be in focus given the aggressive nature of SCLC," he said. Chang has an outperform rating on Zai Lab stock.
Highly Rated Biotech Stock
Notably, Zai Lab stock has a strong Relative Strength Rating of 94. This means shares rank in the top 6% of all stocks when it comes to 12-month performance, according to IBD Digital.
Shares are also trading well above their 50-day and 200-day moving averages, MarketSurge shows.
Follow Allison Gatlin on X, the platform formerly known as Twitter, at @IBD_AGatlin.
