Here's Why Idera Pharmaceuticals, Inc. Is Surging Today

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What happened

Shares of Idera Pharmaceuticals, Inc. (NASDAQ: IDRA), a clinical-stage biotech advancing novel therapies for skin-related diseases, are getting a bump after the company presented trial results at the annual European Society for Medical Oncology conference on Sunday. The stock is up about 16.9% as of 12:05 p.m. EDT on Monday.

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So what 

On Sunday, Idera Pharmaceuticals presented final results from the dose-selection stage of a phase 1/2 trial investigating its melanoma candidate IMO-2125 in combination with Yervoy from Bristol-Myers Squibb. All but one of 18 patients enrolled in the exploratory trial experienced disease progression after treatment with increasingly popular PD-1 inhibitors Opdivo or Keytruda, and nine were treated with the dosage that will be used in the phase 2 stage of the trial.

The published response rate among melanoma patients that progress after treatment with PD-1 inhibitors is between 10% and 13%. This is why investors were pleased to see that adding IMO-2125 to Yervoy shrank tumors in six of nine patients treated with the 8 mg dosage that will be used in the next part of the trial.

Now what

While a 66.7% response rate for the combo certainly looks great against the historical backdrop, there are a couple reasons today's bump wasn't a lot bigger. First, nine patients isn't a big enough group to draw conclusions from. Plus, historical trends for existing treatments that point to impressive efficacy rates for experimental drugs have a nasty tendency to evaporate during trials designed to confirm clinical benefits.

The findings are impressive enough to warrant a larger phase 3 study with PD-1 refractory melanoma patients. Idera intends to begin enrolling patients for a trial that could support a new drug application for IMO-2125 early next year. If this candidate or Idera's dermatomyositis hopeful, IMO-8400, can repeat previous results in a timely fashion, this stock could soar.

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Cory Renauer has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.