Just under two weeks ago, Kazia Therapeutics Ltd [ASX:KZA] was making headlines.
The company had received ‘the nod’ from the US Food and Drug Administration (FDA) it sorely needed. That is, securing a key designation that allowed Kazia to speed up its development of a key drug for children with cancer.
Today though, on the back of this already impressive win, Kazia has secured another victory. Once again, it has won over the FDA with the potential of its key brain cancer treatment.
A win that has sent the KZA share price surging 38.79% higher at time of writing.
KZA in the fast lane
As Kazia reports, the FDA has granted paxalisib (its glioblastoma drug) ‘fast track designation’.
This is a status that is reserved purely for drugs that are deserving of an expedited development process. They are given priority because they address an unmet medical need for serious conditions.
When it comes to paxalisib, this is really no surprise.
The drug has already shown early potential to offer better outcomes for glioblastoma, which is one of the most common and aggressive forms of brain cancer.
This FDA designation is a ringing endorsement of the company’s hard work, giving credence to the fact that it may have a very promising product on its hands.
A fact that CEO Dr James Garner is certainly proud of:
‘In awarding Fast Track Designation to paxalisib, FDA has recognised the drug’s potential to meaningfully improve outcomes for patients with glioblastoma.
‘This is a very powerful acknowledgement.
‘The opportunities that Fast Track Designation creates, as we move towards an NDA filing, are of great value and have the potential to substantially accelerate the commercialisation of paxalisib.’
Indeed, the challenge now for Kazia is to deliver on all the hype, moving forward with more trials and further research.
Right now, though, shareholders have plenty to be pleased about with the FDA’s acknowledgement.
It’s a resounding win that could be the start of much bigger commercial success.
Should you invest?
Having said that, if you’re not already an investor in Kazia, then now may not be the time to grab a stake.
This is a stock at peak hype right now, coming off the back of two major announcements that have spiked the share price.
That’s not to say that the stock can’t go higher — far from it. If paxalisib really does live up to expectations, then Kazia shares could go parabolic.
However, the company still has a long road of trials ahead of it. Trials that will be costly and time-consuming.
Even with ‘fast track designation’, drug development is not a speedy process.
And there is always the chance that paxalisib could fall short in trials along the way — a result that would certainly weigh on the share price.
That’s just the speculative nature of biotech stocks like Kazia.
For that reason, your best bet is to simply keep an eye on this stock. Because in this market, there are far more immediate plays that are worthier of your attention right now.
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For Money Morning