At one stage today, the ASX AI healthcare stock was up as much as 170% to 3.8 cents.

The medical technology company's shares have given back most of these gains since then but remains up 80% to 2.5 cents.

Why is this ASX AI healthcare stock rocketing?

Investors were scrambling to buy the company's shares today after it announced the successful completion of primary validation for the Automated Plate Assessment System (APAS) PharmaQC product.

The company's APAS product uses artificial intelligence and machine learning software to automate the imaging, analysis, and interpretation of microbiology culture plates.

The completion of this milestone represents the final step in the product development and technology commercialisation with global healthcare giant AstraZeneca (NASDAQ: AZN).

As a result, AstraZeneca will now undertake an internal secondary validation of the system within its own manufacturing processes. Completion of AstraZeneca's secondary validation is anticipated in the third quarter of calendar year 2024.

If that is successful, then it could be only a matter of time until the ASX AI healthcare stock is generating revenue.

'Incredibly important'

The company's CEO and managing director, Brent Barnes, was very pleased with the news and believes the technology is important to the industry. He said:

Evidence based automation is incredibly important in the biopharmaceutical industry. The completion of our primary validation is a valuable asset to the Company. We expect this data to build confidence in our technology and assist customers with their adoption of APAS PharmaQC.

Many customers we've spoken to over the past 6 months gave positive feedback on our technological approach and we are looking forward to sharing our primary validation data with them. We have set ourselves an ambitious commercialisation schedule for 2024 and expect the customer qualification pipeline to accelerate as we present our APAS PharmaQC technology at a number of key global conferences.

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In morning trade, the ASX All Ords biotechnology share is down 34% to a 52-week low of 21.5 cents.

Why is this ASX All Ords share being sold off?

Investors have been hitting the sell button in a panic on Monday after the company was dealt a major blow from pharmaceutical giant AstraZeneca plc (NASDAQ: AZN).

According to the release, AstraZeneca has made the decision to discontinue the development of AZD0466 following an internal review that was prompted by a small number of asymptomatic adverse events (AEs).

AZD0466 is a highly optimised dendrimer nanoparticle formulation of AstraZeneca's dual Bcl-2/xL inhibitor, AZD4320, which utilises Starpharma's dendrimer drug delivery technology.

The release highlights that the events were unrelated to Starpharma's dendrimer drug delivery technology. And while management believes the AEs do not adversely impact the therapeutic and commercial potential of its technology, that hasn't been enough to convince the market not to sell off this ASX All Ords share today.

Starpharma's CEO, Jackie Fairley said:

Whilst this decision is clearly not what Starpharma would have hoped for, we note that it relates to haematological malignancies and at the highest three dose groups of AZD0466 and was not due to our dendrimer technology.

DEP has demonstrated multiple benefits in Starpharma's clinical studies in patients with solid tissue tumours, including significant preferential accumulation in these tumours compared to blood levels. This development with AZD0466 does not impact Starpharma's DEP platform, the Company's internal clinical and preclinical DEP programs, or DEP partnerships. Starpharma's multi-product DEP License agreement with AstraZeneca remains in effect.

This ASX All Ords share is now down 66% over the last 12 months.

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