The Food and Drug Administration pushed its review date for Amylyx Pharmaceuticals' controversial ALS treatment on Friday, and the biotech stock skyrocketed.
The news gave investors fresh hope after a panel of FDA experts decided there's not enough evidence to support the drug's benefit in amyotrophic lateral sclerosis. Also known as Lou Gehrig's disease, ALS is a progressive neurodegenerative condition that affects nerve cells in the brain and spinal cord.
Previously, the FDA planned to make a decision on Amylyx's drug, dubbed AMX0035, in late June. But Amylyx recently submitted additional clinical data, and the agency needs three more months to review it.
"Following the disappointing (advisory committee meeting) the investment community has expected AMX0035 to not get approved by the FDA, but it appears that the FDA is still struggling with its decision," SVB Securities analyst Marc Goodman said in a report to clients.
On the stock market today, the biotech stock soared 26.4 to 12.35. At one point, shares rose nearly 43% during the regular session.
Biotech Stock Trends Down
Patient advocates have pushed for the FDA to approve Amylyx's drug. One expert speaking at the recent FDA advisory committee meeting argued it's comprised of two ingredients already on the open market. Still, just four out of 10 panelists voted in favor of the drug's benefit.
In a study called Centaur, the medicine helped improve muscle function. But it's unclear whether it prolonged survival.
Amylyx is running another study called Phoenix to confirm the drug's benefit, but it asked for early approval based on the Centaur study.
Following the negative advisory committee vote on March 30, Amylyx shares plummeted nearly 14%. The biotech stock has continued to trend down since then.
'Major Amendment' To Application
Amylyx didn't identify which data it submitted to the FDA. But the submission constitutes what the FDA calls a "major amendment" to the drug's application, resulting in an extended review period.
"Overall, the (application) is still under active review, so while the investment community has been assuming that a positive Phoenix study will be necessary for approval, the door is still open for a possible positive surprise," SVB's Goodman said.
He has an overweight rating on the biotech stock.
Amylyx launched its initial public offering in January and saw quick but short-term success. The biotech stock skidded in March on FDA action for AMX0035.
Follow Allison Gatlin on Twitter at @IBD_AGatlin.
