Getting a 998% return in one day on stellar phase 2 trial results is easier to do when one starts with a $62 million market cap.
The market cap is now $686 million.
The company claims a potential $5 billion market somewhere on their website. If this is true for their drug G2P, the stock seems undervalued, even with the prospect of a future phase 3 trial that might not live up to expectations.
The yahoo finance headline before the market opened this morning certainly helped: “Greenwich LifeSciences Announces Poster Presentation of Five Year Data for GP2 Phase IIb Clinical Trial, Showing 0% Recurrence of Breast Cancer.”
0% recurrence after five years looks like a cure for breast cancer at first glance. Another way to say it is 100% recurrence free after 5 years (Bare with me.)
A few factors take some of the sheen off this headline. First, the above results only apply to Her2+ breast cancers, which are 25% of the BC population.
Second, treatment with Herceptin alone, without the synergy supplied by their drug G2P, results in 89% of patients being recurrence free. While going from 89% to 100% recurrence free is a major development that I in no way want to diminish, it doesn’t have the same impact as the headline in the story.
Third, for the 75% of breast cancers that are Her2-, their G2P drug had zero impact on 5 year recurrence-free rates, which remained at 76%.
Side note: Breast cancer is notorious for recurring up to 20 years later, so the 5 year metric doesn’t hold as much weight as it does with GBM or lung cancer.
Fourth, the p value was 0.0338, which is statistically significant but with such a headline one might expect p=0.0001.
Fifth, a multi year phase 3 trial hasn’t begun, which means a long time before any meaningful news hits again, though I suppose there might be speculation on partnering or buyout.
Sixth, I don’t see a pipeline, which also affects news flow and valuation.
All of the above is provided for context in interpreting the over simplified headline. I’m adding the stock to my watch list and may invest in the future, depending on how things evolve.
