Why is the Actinogen (ASX:ACW) share price up 414% in 3 months?

This biotech company has been going gangbusters over the past year. Let’s take a closer look.

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The Actinogen Medical Ltd (ASX: ACW) share price has been an investor’s dream of late, rising 414% in the last 3 months and 552% over the last 12 months. With a raft of good news for the biotechnology company lately, we take a closer look.

Actinogen has a large addressable market, developing drugs for Alzheimer’s disease and the cognitive decline associated with other neurological and metabolic diseases. Its main focus is a drug called Xanamem, a molecule enzyme inhibitor that restrains excess cortisol production inside brain cells. Cortisol is otherwise known as the stress hormone.

So what’s there to like about Actinogen?

On 5 February, the United States Food and Drug Administration (FDA) granted Actinogen’s drug Xanamem a rare paediatric disease designation for the treatment of Fragile X syndrome. The approval is significant as it includes commercial, development and regulatory benefits, as well, it allows a priority review designed to increase overall speed to market.  

Fragile X syndrome is a rare and serious genetic disorder, typically diagnosed in children but with life-long symptoms. The announcement put the company front and centre on the world stage, and investors took note.

Recently, on 2 June, Actinogen announced the progression of its clinical development program to treat patients with Alzheimer’s Disease. The company received approval from the Bellberry Human Research Ethics Committee to commence the first part of the XanaMIA study, designed to study improvements in cognitive ability in older volunteers, and patients with Mild Cognitive Impairment, the first clinical-stage of Alzheimer’s Disease. 

A new CEO is taking the wheel

The appointment of the company’s new CEO, Dr Steven Gourlay, on 15 March, also appears to have had a positive effect on the Actinogen share price.

Gourlay’s CV is impressive; he was the founding chief medical officer at US-based Principia Biopharma Inc and was responsible for the supervision of multiple preclinical, first-in-human, Phase 2 and 3 clinical trial programs. The trials focused on four small molecules in orphan immunological diseases, multiple sclerosis and cancer. Dr Gourlay’s work supported a successful NASDAQ IPO of Principia Biopharma Inc. in 2018,  subsequently followed by an acquisition by Sanofi for US$3.7B in 2020.  

In addition, investors like to see insiders who increase their skin in the game. At the end of March, Actinogen director George Morstyn acquired 2,550,000 shares in the company at a value of almost $72,000. 

With proven management, trials progress globally and insiders willing to invest in the company, it seems the stars are aligning quite nicely. The Actinogen share price is trading at 16 cents at the time of writing.

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Motley Fool contributor Frank Tzimas has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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