Kezar (KZR) stock soars 49% on positive lupus trial results

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Highlights:

  • Kezar Life Sciences develops novel therapeutics for autoimmunity-related problems.
  • It announced positive top-line data from its Phase 2 lupus clinical trial on Tuesday.
  • The stock rose 3.39% in one year.

Shares of biotechnology company Kezar Life Sciences, Inc. (NASDAQ: KZR) rose 48.88% to US$8.605 at 1:11 pm ET on June 28 after announcing its positive clinical trial results.

Kezar on Tuesday presented its top-line data from its Phase 2 trial to evaluate zetomipzomib, a first-in-class selective immunoproteasome inhibitor in active lupus nephritis patients.

The company said the results showed a “clinically meaningful renal response” to zetomipzomib. It noted that patients experienced reduced extra-renal manifestations of lupus, adding that they seemed to have “well-tolerated” the novel drug.

The company plans to continue developing zetomipzomib and explore opportunities for systemic lupus erythematosus development, said Noreen R. Henig, MD and CMO of Kezar.  

According to the company, patients were given zetomipzomib without an induction therapy in the phase 2 trial, which is different from other trials published in lupus nephritis.

The results showed the overall reduction in renal response was 50% or more in urine protein to creatinine ratio (UPCR) in 11 of 17 patients. The UPCR was 0.5 or less in 6 of 17 patients in six months. It said no grade 3 infection was reported in the trial.

The San Francisco, California-based company specializes in novel small molecule therapeutics to treat unmet needs in autoimmunity and cancer. 

Financials:

The company has not generated any revenue from product sales yet. For the quarter ended March 31, 2022, its net loss was US$16.02 million or US$0.26 per diluted share compared to a net loss of US$12.9 million or US$0.25 per share diluted in the corresponding quarter of 2021.

It had US$38.9 million in cash and cash equivalents as of March 31, 2022. Its current market capitalization is US$532 million. The stock price moved from US$18.55 to US$4.30 in the last 52 weeks. 

Bottom line:

The stock rose 3.39% in one year at the closing price of 5.78 on June 27, 2022, whereas the Nasdaq Biotechnology Index fell around 27% in the same period. The Healthcare sector is not directly affected by macroeconomic factors, such as inflation and interest rates, as the companies are funded generally by grants. The smaller companies typically do not have products to generate revenue. However, the sector is complex and has different stakeholders. Hence, investors should exercise due diligence before investing in small-cap healthcare stocks. 


 


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