Guess which ASX micro-cap stock is rocketing 80% on FDA clearance

The FDA has given the thumbs up to this company's trial plans.

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Chimeric Therapeutics Ltd (ASX: CHM) shares are getting a lot of attention on Tuesday.

In early trade, the ASX micro-cap was up over 80% to 4.8 cents.

The clinical stage cell therapy company's shares have eased back a touch since then but remain up 69% to 4.4 cents currently.

Why is this ASX micro-cap rocketing?

The catalyst for this strong gain has been news that the cell therapy company has received clearance from the U.S. Food and Drug Administration (FDA) for the Investigational New Drug (IND) application of CHM 2101.

CHM 2101 is Chimeric's first in class CDH17 CAR T cell therapy for gastrointestinal cancers. With receipt of this clearance, the company can now begin initiating a multi-centre, open label Phase 1A/B clinical trial for patients with advanced colorectal cancer, gastric cancer, and neuroendocrine tumours.

The release notes that the clinical program for CHM 2101 builds upon the preclinical studies published in the preeminent scientific journal, Nature Cancer, in March 2022. These experiments demonstrated that CHM 2101 was able to eradicate established tumours in seven cancer models with no toxicity to normal tissues.

Commenting on the trial plan, Michael R. Bishop, MD, Professor of Medicine and Director, The David and Etta Jonas Center for Cellular Therapy, University of Chicago, said:

I am really excited about the planned Phase 1 clinical trial of CHM 2101 and the opportunity to bring a potentially transformative new investigational agent to cancer patients who need them most.

Following today's gain, this ASX micro-cap now has a market capitalisation of approximately $23 million.

Motley Fool contributor James Mickleboro 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 Scott Phillips.

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