Bionova Inc. (NASDAQ:BNVI) Stock Spikes 20%

Bionovo Inc. (NASDAQ: BNVI) Stock Spikes 20%

Shares of Emeryville, California-based Bionovo Inc. (NASSDAQ: BNVI) surged nearly 20% to $0.524 in today’s mid-day trading, retracting from a daily high of $0.63. The company discovers and develops drugs that focus on safe and unmet medical needs in women’s health and cancer.

Today’s trading activity was spurred by yesterday’s announcement that the U.S. Patent and Trademark Office (USPTO) has issued a patent covering a method of using the company’s proprietary drug candidate Bezielle (R) (BZL101) for the treatment of metastatic breast cancer. According to the company, this is its second patent and it has another 70 patent applications currently pending.

According to the company’s annual report, its lead drug candidate, Menerba, for the treatment of vasomotor symptoms of menopause, is a safe and effective alternative to existing FDA-approved therapies, which pose a significant risk to women for developing breast cancer. In preclinical testing Menerba has shown that it does not lead to tumor formation in either breast or uterine. The company is seeking FDA approval for further clinical testing.

Menerba is obviously a drug driving the direction of the company; any positive development related to it should boost the stock price in the future. In addition to Bezielle, the company has other preclinical drug candidates in the pipeline.

The company said does not expect to generate profits over the next several years and that unless any of the company’s drug candidates are approved by the FDA, the company will continue to incur operating losses. It’s hard to pinpoint how long FDA approval will take; a lot depends on the safety and efficacy of these drugs and how quickly the company can get them through preclinical trials. We think Menerba may be up for FDA approval in the next two to three years.

What does the stock hold? As with any drug development company, you can bet big on the future possibility of a potential blockbuster drug.  In case of Binovo, the company has a few promising preclinical drug candidates at the moment. We suggest keeping an eye on further development. Any future development of a potential blockbuster drug could also make the company a potential acquisition target.