YM BioSciences Finally Bottoming?

YM BioSciences Inc.

is a drug development company advancing a portfolio of hematology and cancer-related products. The company is advancing three clinical-stage products: CYT387, an oral small molecule oral dual inhibitor of the JAK1/JAK2 kinase; nimotuzumab, an EGFR-targeting monoclonal antibody; and CYT997, a potent oral vascular disrupting agent. As with most small biotech companies, its business is based on the drugs in its pipeline and the results of the studies determine the direction of the stock. On Monday, October 31st, YM BioSciences announced that preliminary results of a Phase II study evaluating the safety and efficacy of its nimotuzumab drug were reported at the 43rd Congress of the International Society of Paediatric Oncology conference being held in Auckland, New Zealand. "Nimotuzumab is an anti-EGFR antibody that has shown promising activity in a previous Phase II study in patients with recurrent/refractory DIPG, a particularly severe, inoperable form of cancer for which there are currently no lifesaving effective treatments," said Dr. Ute Bartels at The Hospital for Sick Children in Toronto, Canada. "In the study we conducted, nimotuzumab was found to be safe and well tolerated. In this very challenging disease, a small subset of patients showed prolonged survival and benefit from nimotuzumab,” Bartels continued. However, YM BioSciences announced today it would report updated results from its Phase I/II myelofibrosis study of CYT387, a JAK1/JAK2 inhibitor, in a poster session to be held from 6:00pm - 8:00pm on Monday, December 12th at the 53rd Annual Meeting of the American Society of Hematology being held in San Diego, California. CYT387 was well tolerated. Seventy three percent of subjects reported treatment-related adverse events, with the majority reported as Grade 1. The most common Grade 3-4 treatment-related adverse events included thrombocytopenia and hyperlipasemia, occurring in 16% and 3% of subjects respectively. Twenty five of 163 (15%) of subjects had discontinued from the nine month core study, giving a retention rate of 85%. After this data was reported, the stock fell about 3%. Obviously, these results were not what some investors were expecting. The stock has been in a bear trend since the summer as it has fallen over 60%, but it looks to be bottoming out as new lows have not been made in over a month. YM BioSciences has tested its 50-day moving average and moved lower. However, the range of the stock stays between its bullish Ascending Triangle pattern. If YM BioSciences breaks above $1.92 and continues through the 23.6% Fibonacci retracement at $2.00, we could see the stock move up to $2.35 (the 38.2% Fibonacci retracement) or to the 200-day moving average around $2.44. Be aware that these small biotech stocks are very volatile and any clinical data can send this stock to the moon or to zero. If YM BioSciences breaks below the support line of the Ascending Triangle, look for it to test 52-week lows of $1.46.