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Why Is Biodexa (BDRX) Up 70% Today?

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Oncology specialist Biodexa (NASDAQ:BDRX) soared on Friday as the company disclosed the entering of an exclusive worldwide license to develop and commercialize a key therapeutic. Fundamentally, the announcement sent BDRX stock flying up about 70% in the late afternoon session as the drug addresses a disease for which there are no approved therapeutic options.

According to a Seeking Alpha report, Biodexa inked a deal with Rapamycin Holdings, which does business as Emtora Biosciences. The licensing centers on a therapeutic called eRapa, also known as rapamycin. The drug targets a disease called Familial Adenomatous Polyposis (FAP). What makes FAP such a debilitating condition is that its current standard of care involves only surveillance and, eventually, surgery.

Further, Biodexa’s press release points out that patients afflicted with FAP typically must undergo surgical removal of the colon and/or the rectum. The biotech states that about 100,000 people in the U.S. and Europe suffer from the disease.

Biodexa CEO and CFO Stephen Stamp stated that if FAP is left untreated, “it almost always leads to incredibly invasive surgery and a major deterioration in the quality of life.” Therefore, it’s vitally important that a therapeutic be approved and developed.

Financial Considerations Also Bolster BDRX Stock

Per Seeking Alpha, the aforementioned licensing rights “come with $17M in non-dilutive funding for a pivotal Phase 3 study of the drug in the treatment” of FAP. Further, management added that the Cancer Prevention and Research Institute of Texas provided the $17 million grant.

In addition, the eRapa license includes a $3 million grant from the National Cancer Institute. This fund is earmarked for a Phase 2 study of eRapa in the treatment of non-muscle invasive bladder cancer. Therefore, the multi-pronged nature of the underlying therapeutic likely helped invigorate sentiment for BDRX stock.

Prospective investors will likely highlight Biodexa’s upcoming two medical conferences that will take place during the second quarter of this year. Management will discuss Phase 2 results regarding eRapa’s efficacy in treating FAP. Potentially, encouraging news on this front could help add to impressive recent gains for BDRX stock.

Why It Matters

Currently, the only analyst that covers BDRX stock is Ladenburg Thalmann’s Aydin Huseynov. It’s a massive endorsement, a “buy” rating with an $8 price target. That implies a 550% upside potential. However, it’s worth noting that Biodexa is extremely speculative. Even with Friday’s pop, BDRX is down 54% year-to-date.

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On the date of publication, Josh Enomoto did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

A former senior business analyst for Sony Electronics, Josh Enomoto has helped broker major contracts with Fortune Global 500 companies. Over the past several years, he has delivered unique, critical insights for the investment markets, as well as various other industries including legal, construction management, and healthcare. Tweet him at @EnomotoMedia.

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