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Why AnaptysBio Rose 10.5% Today

Maxx Chatsko, The Motley Fool

What happened

Shares of AnaptysBio (NASDAQ: ANAB) rose over 11% today in what continues to be a wild week for the clinical-stage biopharma. Then again, with the stock down 19% year to date, investors might argue it has been a wild 2018, with plenty of ups and downs.

There was no direct news, although the recent volatility appears to be linked to the company's lead drug candidate currently in phase 2 trials as a potential treatment for atopic dermatitis, also known as eczema. The competitive landscape of next-generation treatments for the skin disease has intensified recently, and it seems Wall Street can't make up its mind on what to do with the nearly $2 billion company.

As of market close, the stock had settled to a 10.5% gain.

A businessman and a column chart showing growth.

Image source: Getty Images.

So what

The stock movements of the last week trace back to July 19, when Novartis agreed to license the atopic dermatitis drug candidate MOR106 from Galapagos and MorphoSys. Similar to ANB020, the lead drug candidate of AnaptysBio, MOR106 is a monoclonal antibody in phase 2 clinical trials. The difference is that a major pharmaceutical company licensed MOR106 for up to $1.1 billion when the up-front payment and potential milestone payments are included. Novartis has also agreed to pick up all development, manufacturing, and commercialization costs, and pay a healthy royalty if the drug hits the market. 

AnaptysBio stock dropped by nearly double digits the day the news was announced, before recovering to a loss of just 3%. Investors were a little bummed-out that ANB020 wasn't the midstage clinical drug candidate for eczema chosen by Novartis.

That said, the company has a robust pipeline with a handful of catalysts on the horizon. Before the end of 2018, ANB020 will start new phase 2b trials for eczema and peanut allergies, in addition to a phase 2 trial for a separate rare skin condition. Meanwhile, phase 2 trials for the drug were recently initiated for psoriasis, while topline phase 2a results are expected during the current quarter. That doesn't include the company's partnered oncology portfolio or two inflammatory-disease programs partnered with Celgene. Needless to say, it's a busy time for the company

Now what

The company's stock is being tossed around by the market so far in 2018, and it may sting to see a competitor's drug licensed off for a cool $1.1 billion. But AnaptysBio has plenty of possibilities. Its lead drug candidate will soon be in at least four midstage clinical trials and is expected to deliver phase 2b results in eczema sometime in 2019. After ending March with over $300 million in cash, AnaptysBio is giving investors no reason to panic over recent volatility. 

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Maxx Chatsko has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Celgene. The Motley Fool recommends AnaptysBio. The Motley Fool has a disclosure policy.