2023-11-27 23:02:00 ET
SpringWorks Therapeutics (NASDAQ: SWTX) stock price bounced back in the overnight session after major developments in the company. The shares jumped by over 16% to $24.10, which was much higher than its closing price of $20.77. It has dropped by more than 30% from the highest point this year.
FDA approval for Ogsiveo
SpringWorks is a biotech company that is developing medicines for rare diseases that affect many people around the world. Its primary products are in the oncology area. It has five drug candidates in its pipeline.
Nirogacestat is aimed at ovarian tumors while Mirdametinib is in mutant solid tumors. Its other drug candidates are aimed to treat EGFR mutant tumors, hipo mutant tumors, and metastatic tumors.
SpringWorks Therapeutics stock price jumped sharply after the Food and Drug Administration (FDA) approved its Ogsiveo, a drug that will treat adult patients with progressing desmoid tumors who require systemic treatment. In a statement, the CEO said :
“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.”
Ogsiveo is an important drug because it will treat tumors that have historically been difficult to treat. These tumors can lead to substantial morbidity and even death. Also, these tumors are often refractory to existing off-label therapies.
The FDA approval happened a few months after the company completed its phase 3 DeFi trial. That trial showed that the drug met the primary endpoint of improving survival rate for its patients.
The other catalyst for the SWTX stock price is its Nirogacestat drug, which aims to treat Desmoid tumors. These tumors are rare, aggressive, soft-tissue tumors that are not cancerous because they do not spread to other parts of the body. But they are highly dangerous because they can lead to death.
SWTX stock price forecast
The SWTX stock price will open much higher on Tuesday because of the FDA approval. This is a common occurrence where shares rise after that approval happens. While the stock jumped by over 16% in extended hours, there is a likelihood that it will open much higher than that. In most cases, however, the initial pops tend to be short-lived since companies have a lot of work to do.
Therefore, I suspect that the stock will rise to about $25 and then resume the downward trend in the coming days. If this happens, it will likely retest this month’s low of $18.10. We saw this with SpringWorks when it jumped by over 20% after the DeFi study in 2022.
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