The markets are starting the week off on a fantastic note, with gains across all the major exchanges. With treasury note yields tumbling back down and fears of inflation abating, investors are jumping back into the stock market. However, one of the biggest winners on Monday was a relatively obscure biotech stock that few people have heard of. Morphic Holdings (NASDAQ: MORF) made a few major announcements that helped send its stock price more than doubling.
More than anything else, Morphic announced the results of its early phase 1 clinical trial for its inflammatory bowel disease (IBD) treatment, MORF-057. So far, the drug has been largely well tolerated by patients, with no adverse reactions being reported by patients. As for the results themselves, the drug proved to be quite effective overall.
It’s a big deal because Morphic already has a major deal with pharmaceutical giant AbbVie (NYSE: ABBV) to take any promising drug candidate off its hands once it passes enough clinical trials. So far, AbbVie initially paid $100 million upfront to Morphic to acquire some of its promising candidates. If MORF-057 turns out to be successful, AbbVie could end up paying, even more to buy it out.
“These results for MORF-057 further validate the MInT Platform’s ability to design small molecules that potently and selectively target this class of receptors with tremendous therapeutic potential,” said Morphic Holdings chief science officer Bruce Rogers in a statement on Monday.
At the same time, Morphic has other candidates currently in development. This includes a treatment for solid tumors, fibrotic diseases, as well as Crohn’s disease, which are all moving ahead reasonably well. For a company with no product on the market yet, Morphic is entirely reliant on this early partnership revenue from AbbVie to pay its bills.
Morphic also announced on Monday that the company planned to issue around $200 million in shares of common stock. While this generally isn’t great news for shareholders, as more stock being issued tends to dilute existing share prices, the overwhelmingly positive news of this phase 1 trial are overpowering any negative influence that this new stock offering news would otherwise exert.
Shares were up around 135% over the course of the day in response to these announcements, making Morphic the best performing stock of the day. Even over a 12-month time frame, Morphic is up a staggering 437.1%, making it one of the best performing biotech stocks in the market right now. Otherwise, most biotech stocks that have done well in 2020 have some association with COVID-19 or some COVID treatment. As such, Morphic is one of the few small-cap biotechs that are surging but aren’t exposed to the coronavirus treatment market in any way. Going forward into 2021, the prognosis for Morphic seems very bullish.
Morphic Holdings Company Profile
Morphic Holding Inc is a biopharmaceutical company applying its insights into integrins to discover and develop a pipeline of oral small-molecule integrin therapeutics. Integrins are a target class with multiple approved injectable blockbuster drugs for the treatment of serious chronic diseases, including autoimmune, cardiovascular and metabolic diseases, fibrosis and cancer. – Warrior Trading News
