Shares of CASI Pharmaceuticals (NASDAQ: CASI) rose over 23% today after the company announced that the Center for Drug Evaluation of China, which conducts technical reviews of drug applications in the country, has scheduled a review for Evolmela. That's the company's brand of the chemotherapy drug melphalan, which is used to treat multiple myeloma, a type of blood cancer. The closed meeting is scheduled to take place between April 25 and April 26.
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This week's news was not really news at all, as recent regulatory changes in China suggested that Evomela would snag an advisory committee meeting after being accepted for priority review by the China Food and Drug Administration (CFDA) in September 2017. Nonetheless, the update has Mr. Market excited.
As of 3:15 p.m. EDT, the stock had settled to a 10.1% gain.
CASI Pharmaceuticals finally appears to be making progress with its licensing portfolio. The company acquired the rights to Evolmela in the Chinese market from Spectrum Pharmaceuticals. Wall Street didn't take that agreement too seriously for quite some time -- not even after the drug was approved by the U.S. Food and Drug Administration in early 2016 or after the CFDA accepted the drug for review in December 2016.
It wasn't until September 2017, when CASI Pharmaceuticals was told the CFDA had accepted Evolmela for priority review, that investors began to take notice. The previously micro-cap stock has jumped 620% since then.
There still is quite a bit that needs to happen. After the advisory committee convenes at the end of April, it's expected to make a recommendation to the Center for Drug Evaluation, which will then make a recommendation to CFDA. Then the CFDA will notify the company of its decision. There's no timeline for how long investors will be waiting for the ultimate decision.
CASI Pharmaceuticals doesn't generate any revenue and has no track record to speak of, so that adds a considerable amount of risk that investors need to consider. While the Chinese market is massive and currently bereft of any formulations of melphalan, perhaps hinting at a significant opportunity for the inexperienced company, approval is not guaranteed. The stock's recent volatility may scare away most risk-averse investors.
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