Junior biotech hopeful Prima BioMed Limited (ASX: PRR) appears to have rekindled its incredible rally today, surging nearly 43% higher to trade at 13 cents.
Just seven days ago, Prima BioMed's shares were changing hands for 2.2 cents each but rallied as high as 19 cents by early Friday, representing a 764% gain. They then retreated to 9.1 cents at the end of the week (on the back of a 43% decline on Friday), but have restarted their ascent today.
The company has been in the headlines recently due to the promising results from its Phase II CAN-003 trial which showed that second remission ovarian cancer patients being treated with CVac had experienced a significant improvement in the median survival rate, with data suggesting it could add "at least 16 months" to a patient's life.
The stock surged further after it successfully raised $15 million to fund the development of two new clinical trials. Today, the shares are bouncing off a new announcement which will see its "iCAN" software platform commercialised for use in other cellular therapies worldwide. Prima BioMed said that iCAN had contributed to making CVac an efficient and relatively low cost cellular therapy. iCan was designed by Database Integrations Inc. (DBI).
Prima believes other developers of cellular therapies can also benefit from the software platform. Prima and DBI will work together to seek sub-licenses for the system whereby it is envisaged that Prima will earn a percentage of the revenues DBI earns from the sub-licenses.
In relation to the latest development, Jackie Littlefield, who is DBI's Chief Operating Officer said "we see potential for iCAN to become an industry standard, and look forward to working with Prima to introduce our system to new players in the field."
Should you get on board the biotech train?
Prima BioMed is a perfect example of the ability of biotechnology players to generate enormous returns for shareholders, literally overnight. Indeed, other companies such as Pharmaxis Ltd. (ASX: PXS) and Sirtex Medical Limited (ASX: SRX) have also demonstrated that recently upon the release of strong or surprising trial results, but there is also an enormous level of risk involved.
The market has a way of getting overly excited about the early success of a company and can tend to act irrationally when buying.
Whether Prima BioMed can continue to soar in price remains to be seen, but given its enormous run up over the last week it is definitely a risky bet. While you could look to put a small amount of cash to work in the sector in the hope of striking gold, you would be wise to limit your exposure and maintain a diversified portfolio at all times. A much safer bet than Prima BioMed
