What happened
Shares of the developmental-stage immunology company Vera Therapeutics (VERA -3.00%) gained a stately 49% this week, according to data provided by S&P Global Market Intelligence. Even so, the drugmaker's shares are down by a hefty 53% for the full month of January.
What sparked this abrupt run-up in Vera's shares? In brief, the market appears to be reassessing the company's value in the wake of its dramatic sell-off in early January.
So what
Earlier this month, Vera's shares cratered following the top-line readout of its mid-stage immunoglobulin A nephropathy (aka Berger's disease) drug atacicept. While a pooled analysis of the drug's 75/150 mg doses yielded a statistically significant 31% mean reduction in protein in the urine (proteinuria) at week 24, Wall Street wasn't convinced this efficacy result would be competitive against other therapies in development for Berger's disease.
Despite these middling efficacy results, however, Vera still plans on moving forward with a registration-enabling trial for atacicept in this setting. The drug's phase 3 trial is planned to start later this year. Although the development timeline isn't altogether clear, industry experts think top-line data from this pivotal trial ought to be available by 2025.
Now what
Can Vera's shares continue to rebound with a planned phase 3 trial in the works? I think investors should be cautious with this small-cap biotech stock for the time being. Berger's disease is likely to be a highly competitive indication, and there's no telling where atacicept will ultimately fit into this crowded landscape. That doesn't mean Vera's stock can't march even higher in the near term, but there are more compelling bargain buys in this market right now.
