Which ASX 200 stock is jumping 11% on big news?

Investors are responding very positively to a big announcement.

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Clarity Pharmaceuticals Ltd (ASX: CU6) shares are having a strong session on Thursday.

In morning trade, the ASX 200 pharma stock is up 11% to $2.31.

This compares favourably to the ASX 200 index, which is up 0.3% at the time of writing.

A hipster dude leaps in the air with glee, seeing positive news on his tablet.

Image source: Getty Images

Why is this ASX 200 stock jumping?

The catalyst for today's strong gain has been the release of a trial update from the radiopharmaceuticals company this morning.

According to the release, Clarity has achieved positive results from the diagnostic Phase II DISCO trial (NCT04438304) with 64Cu-SARTATE in patients with known or suspected neuroendocrine tumours (NETs).

DISCO compared the diagnostic performance of 64Cu-SARTATE at an average of 4 hours (between 3 to 5 hours) and 20 hours post-administration (same-day and next-day imaging, respectively) to the current standard of care 68Ga-DOTATATE.

The release highlights that 64Cu-SARTATE lesion detection substantially outperformed that of 68Ga-DOTATATE. It detected 393 to 488 lesions, whereas 68Ga-DOTATATE identified 186 to 265 lesions among 45 study participants across the readers.

Out of all the lesions identified by the readers, 230-251 were deemed to be discordant (only present on one of the scans). Importantly, of these lesions, 93.5% were only detected on the 64Cu-SARTATE PET/CT scans.

Furthermore, approximately half of all discordant lesions had an available SOT, which yielded a lesion-level sensitivity of 93.4% to 95.6% for 64Cu-SARTATE, but only 4.4% to 6.6% for the current standard of care.

The company notes that based on these "exciting preliminary results", it will commence the next steps to conduct a registrational Phase III study of 64Cu-S ARTATE in NETs with the US Food and Drug Administration's (FDA) guidance.

The ASX 200 stock's executive chair, Dr Alan Taylor, commented:

We are very excited about the initial topline data from the DISCO trial as 64Cu-SARTATE was confirmed to be safe and very effective in detecting NET lesions in patients with known or suspected disease. The DISCO trial demonstrates a significant advantage of our diagnostic over 68Ga-DOTATATE. 64Cu-SARTATE detected almost double the number of lesions compared to the SOC, and, where SOT was available, a very high lesion-level sensitivity of 93.4% – 95.6% in comparison to just 4.4% – 6.6% for 68Ga-DOTATATE for these discordant findings.

In addition to identifying more lesions with our product, lesions detected by 64Cu-SARTATE also exhibited high uptake with low background on the PET scans, making it easier to identify those lesions by readers. Excellent lesion visualisation was also supported by substantial clearance from the liver. The favourable biodistribution of 64Cu-SARTATE PET enabled high-contrast diagnostic imaging for up to approximately 24 hours post-injection, offering greater flexibility in the scheduling of PET/CT scans.

Clarity estimates that the NET diagnostic market in the US is currently around 100,000 scans per year, growing to approximately 120,000 scans per year by 2029. This gives the ASX 200 stock a significant market opportunity if all goes to plan.

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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