Mustang Bio Stock Jumps 180% After FDA Grants Orphan Drug Status to Brain Cancer Drug

Clinical-stage biotech firm Mustang Bio (NASDAQ:MBIO) stock rallied 180% on Monday to £2.46 ($3.34) per share after the US Food and Drug Administration granted Orphan Drug Designation to its MB-101 drug candidate for the treatment of recurrent diffuse and anaplastic astrocytoma and glioblastoma, two types of fast-growing brain tumours.

The FDA grants this designation to drugs intended for safe and effective treatment, diagnosis, or prevention of rare diseases or disorders that affect fewer than 200,000 people in the US. The drug status offers several incentives, like tax credits toward clinical trials costs upon approval and prescription drug user fee waivers. Furthermore, the orphan drug status means the drug candidate is entitled to seven years of market exclusivity for the disease in which it has the designation. Overall, the designation offers the company multiple strategic advantages in the development and commercialisation of its therapies.

The company is also advancing a drug regimen of its CAR-T drug MB-101 and oncolytic virus MB-108, which it calls MB-109, as the novel combination showcased encouraging data to optimise clinical outcomes. However, advancing the MB-109 program will depend on whether the company can secure more funding or a partnership deal.

In an ongoing phase 1 trial, MB-101 was well-tolerated and 50% of participants achieved stable disease or better, with two partial responses and two complete responses lasting for 7.5 months and 66 months, respectively.

'We are thrilled that MB-101 received Orphan Drug Designation on time and with a designation that is broader than the indication proposed. The Orphan Drug Designation for MB-101, coupled with the Orphan Drug Designation granted previously for MB-108, is strong validation for our science, as we hope to advance MB-101, in combination with MB-108, as a potential treatment option for patients living with malignant glioma, including patients with recurrent glioblastoma and high-grade astrocytomas,' Manuel Litchman, president and CEO of Mustang said in a press release.

Litchman added that the strategy to combine the drug candidates could help reshape the tumour microenvironment to make 'cold tumours hot,' potentially enhancing the efficacy of MB-101 CAR-T cell therapy.

While the company significantly narrowed its losses in Q1 and was also able to reduce its operational expenses, the company has a limited cash runway as it had accumulated a deficit of £292.3 ($396.9 million) as of March 31. The company had £10.4 ($14.2 million) in cash and cash equivalents at the end of the quarter. Despite challenges, brokerages like HC Wainwright and Cantor Fitzgerald maintained a 'buy' rating on the stock.

Mustang Bio's project pipeline includes promising candidates, such as the MB-107 gene therapy for X-linked severe combined immunodeficiency and the MB-103 CAR T cell therapy for various hematologic malignancies.

While the stock price responds to the major FDA milestone, investors should consider the company's potential for raising more funds, upcoming trial updates, and the regulatory landscape before investing in the stock.

Disclaimer: Our digital media content is for informational purposes only and not investment advice. Please conduct your own analysis or seek professional advice before investing. Remember, investments are subject to market risks and past performance doesn't indicate future returns.