Why is Nanobiotix Up Over 300% in 3 Days?

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In an article last year we highlighted Nanobiotix (EPA:NANO), a company that has developed nanoparticles that interact with X-rays and maximize the effect of radiotherapy within tumor cells. These nanoparticles are designed for a single direct injection into the tumor. Since 50-60% of cancer patients receiving radiotherapy, the potential market size of this technology is huge.

Just over the past 3 days, Nanobiotix (EPA:NANO) has seen their shares increase over 300% on the back of a press release that announced positive results from the pilot phase of NBTXR3 in patients with advanced soft tissue sarcoma (STS). The press release went on to state:

On 10 February 2014, the Independent Data Monitoring Committee (IDMC) met and gave a positive assessment of the recent pilot STS data which showed that NBTXR3 had a good safety profile, which is infrequent in oncology. The positive results from the pilot phase of NBTXR3 in patients with advanced soft tissue sarcoma (STS), allow Nanobiotix to finalize and to announce its development plan for the launch of NBTXR3 on the market.

The key implication of this announcement is that Nanobiotix’s lead product, NBTXR3, could be CE marked for sale in the European Union by 2016 (one year earlier) as opposed to previous estimates of 2017. Nanobiotix is adopting the following strategies for commercializing NBTXR3 across three continents :

Nanobiotix_Development_Plan

Was an over 300% increase in share price merited given the announcement of “positive results” from a pilot phase of NBTXR3? There could be a significant revenue milestone from PharmaEngine associated with these “positive results” but it hardly seems such a sharp increase is merited for a one year earlier possible sale of their lead drug candidate. For speculators, there may be profits to be made in the short term, but for investors who find Nanobiotix compelling, they may be best served to wait until the hype recedes and establish a position when the shares find a base. Given such dramatic reactions by investors to a whiff of good news, the slightest whiff of negative news could send these shares spiraling providing a good entry point for those who believe in the potential of the underlying technology. On the other hand, any announcement of a partnership with a big pharma company for approval and sale in the US could send shares soaring again.

Here at Nanalyze, we complement our tech investments with a portfolio of 30 dividend growth stocks that pay us increasing income every year. Learn how to build your own dividend growth stock portfolio in our report on Quantigence - A Dividend Growth Investing Strategy - freely available to Nanalyze Premium subscribers.

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