Biotech can be an unpredictable space. What may seem like a tenuous, or almost nonexistent link/development outside of the sector, has the potential within the sector to serve up considerable volume and – in turn – shifts in market capitalization. We've just seen exactly that in Eleven Biotherapeutics Inc (NASDAQ:EBIO).The company gained more than 32% throughout Wednesday's session, and while it dipped back a few percentage points after hours, the company has clawed back the majority of the value lost throughout end October, and if Wednesday's volume is anything to go by, there remains plenty of potential for further upside.Some will argue that the gains are just speculators loading up ahead of earnings, which are set to hit press on Monday November 14. There's probably a bit of that, sure. The company has picked up a nice licensing deal this year so far with biotech behemoth Roche Holding Ltd. (ADR) (OTCMKTS:RHHBY), and there's an acquisition just closed a couple months ago, and markets are looking to earnings to identify the (albeit early) impact of both of Eleven's numbers.We think there's another element playing into valuation right now, however, and it's the appointment of the company's former CEO, Abbie Celniker, to partner at Third Rock. Celniker took a board position in September, stepping aside for Stephen Hurly, the CEO of the company that Eleven took over, Viventia Bio, to take her place as CEO of Eleven.Now, exactly how Celniker's appointment as partner at Third Rock is going to benefit Eleven is unclear; but that said, and assuming she remains on the board of the latter, to have a board member as former CEO and now, in a controlling position at a company that has raised close to $2 billion in fund capital, can’t hurt.So, her influence on Third Rock, and her association with Eleven, looks like it might filter through to some medium term support for the company. That said, what's outside of this appointment that might support near term growth?Well, the obvious near term highlight is the upcoming earnings report – but not really because of the numbers. Markets will be looking to the operational update that accompanies the figures for insight into the now lead assets – Vicinium and Proxinium.When Eleven acquired Viventia, it basically became the latter. The move was essentially a reverse merger to bring Viventia into the public arena quickly and easily, and while the name remains Eleven (likely a decision backed by Third Rock more than anything else) the company's pipeline, outside of the Roche partnership, is Viventia's.It's this pipeline, therefore, that we are looking as driving value beyond the latest Celniker promotion.Specifically, we're looking for some degree of confirmation that the pipeline is on track for development in line with the timelines first announced at the acquisition.Vicinium, which is currently under investigation for the treatment of non-muscle invasive bladder cancer (NMIBC), is in a phase III trial right now. Data to date has been positive, having demonstrated complete response (CR) rates of 39.1% and 40% at 3 months, respectively, and no drug-related serious adverse events, but the phase III is a slow burner, and data isn’t expected to hit press before the first half of 2018. With that said, interim should hit at some point mid 2017, and we should get some degree of insight on the back of this release.The secondary candidate, Proxinium, while slightly behind along the development pathway, is probably more of a near term value driver, based on the impact of a trial initiation. The company expects to kick off a phase II during the first quarter of 2017, targeting late-stage squamous cell carcinoma of the head and neck. For us, this is a bit overdue. The drug already preformed in phase II, and Viventia initially stated it wants to kick of a pivotal early 2016. Obviously that's come and gone, but exactly what Eleven hopes to prove by revisiting a mid stage trial remains to be seen. We'll keep an eye on it as things progress and update as we learn more.So there we go. A new hire that should have some degree of impact on Eleven's operations going forward, some numbers to look forward to next week, and two lead candidates heading for applications across the next twenty-four months.One to keep an eye on.We will be updating our subscribers as soon as we know more. For the latest updates on EBIO, sign up below!Disclosure: We have no position in EBIO and have not been compensated for this article.
Discover Hidden Gems
Don't miss the next big opportunity. Subscribe for timely alerts on potential market movers.
