Shares of Reviva Pharmaceuticals Holdings, Inc. (NASDAQ: RVPH) more than doubled in value Monday after the clinical-stage biopharmaceutical company reported encouraging phase 2 clinical trial results for its lead drug candidate.
Positive trial results: Possibility for ‘superior safety’ label
Reviva’s lead drug candidate, RP5063 (brilaroxazine) for Acute Schizophrenia, met its primary endpoint of achieving a reduction in total Positive and Negative Syndrome Scale (PANSS) at the end of the treatment from baseline versus a placebo, the company said in a press release. Specifically, the PANSS total score was lowered by 20 points among individuals who received Reviva’s treatment versus those that were given a placebo.
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The therapy also achieved all safety endpoints in addition to mitigating symptoms, improved social functioning and cognition.
One sentence in Reviva’s press release might explain the bullish reaction to Reviva’s stock on Monday. The company said that if it shows a positive outcome in a pivotal phase 3 clinical study in schizophrenia it could gain a “Superior Safety” label claim from the US Food and Drug Administration.
CEO: ‘Very excited’ about outlook
Reviva CEO Dr. Laxminarayan Bhat said in the press release that schizophrenia impacts around 3.5 million people in the US and 20 million people across the world. But there are no known antipsychotic treatments that offer strong efficacy in battling chronic brain disorders.
“We are very excited about our promising phase 2 clinical data and the potential for our drug candidate to address major unmet needs associated with current treatments,” the CEO said.
Moreover, Reviva’s phase 2 data suggest that its therapy can be used to mitigate negative side effects from current treatments and help improve an individual’s compliance to the treatment.
Reviva stock price action
Reviva’s stock was trading higher by around 10% during Monday’s premarket trading session shortly after its press release. The stock opened at $4.95 Monday and moved higher throughout the morning session with minimal resistance.
Reviva hit an intra-day high of $9.50 on abnormally higher volume. During a typical trading session, the stock records a volume of around 35,000 but by early Monday afternoon, more than 44 million shares traded hands.
Despite the stock’s strong gains on Monday, shares are trading roughly flat since the start of 2021 and are down more than 12% over the past year. The company is classified as a micro-cap given its valuation of around $85 million so penny stocks of this nature could prove to be volatile after recording a large one-day gain.