Why the Cyclopharma (ASX:CYC) share price surged to record high today

The Cyclopharm Limited (ASX: CYC) share price continues to bask in the glory of its clinical trial announcement released earlier this week.

Shares in the diagnostic imaging technology developer surged 28.2% to a record high of $2.50 in the last hour of trade, taking its total gain to 78.6% in three days.

In contrast, the All Ordinaries (Index:^AORD) (ASX:XAO) and the S&P/ASX 200 Index (Index:^AXJO) have lost more than 1% each at the time of writing.

Successful trial triggers Cyclopharma share price surge

Cyclopharma announced on Tuesday that the Independent Data Monitoring Efficacy Committee (DEMC) has unanimously recommended that the company’s Technegas Phase 3 trial (CYC-009) be stopped as it was a success.

This means Cyclopharma can suspend the trial. Following consultation with the US Food and Drug Administration (USFDA), the CYC‐009 study will be terminated with orderly formal site close out and notification to reviewing Investigational Review Boards.

“Given over three decades of clinical use, hundreds of clinical papers and references in practice guidelines featuring the benefits of Technegas, we were always confident of a positive outcome,” said the company’s chief executive James McBrayer.

“The recommendation handed down by the DEMC overnight Australian time validates our confidence in our Technegas technology and further de‐risks our pathway to USFDA approval to sell Technegas in the USA market in 2021.”

Poised to join prestigious ASX club

If Cyclopharma gains final USFDA approval for its lung test, which looks likely, it will join the league of other successful ASX medical device companies.

These include the Nanosonics Ltd. (ASX: NAN) share price, RESMED/IDR UNRESTR (ASX: RMD) share price and Cochlear Limited (ASX: COH) share price.

What Cyclopharma’s technology does

Cyclopharma’s Technegas technology uses very fine radioactive carbon, which is inhaled by a patient. This allows detailed images to be taken by a gamma or single photon emission computed tomography (SPECT) camera.

The technology can be used to diagnose COPD, asthma, pulmonary hypertension and certain interventional applications to include lobectomies in lung cancer and lung volume reduction surgery.

Shareholders breathing easy

The CYC‐009 clinical trial is a prospective, 240‐patient, non‐inferiority comparison against Xe‐133. The Phase 3 trial design was approved under a Special Protocol Assessment granted on 4 October 2016.

The impact of COVID-19 slowed patient recruitment and only 204 patients (or 85% of the targets number) were imaged. This prompted the USFDA to call in an independent committee to review the efficacy data.

The positive recommendation from the DEMC does not guarantee that the USFDA will give CYC-009 its final tick of approval, but this is likely as federal regulators are often guided by independent panel of experts.

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Brendon Lau has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Cochlear Ltd. and Nanosonics Limited. The Motley Fool Australia has recommended Cochlear Ltd., Nanosonics Limited, and ResMed Inc. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. 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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