TM editors’ note: This article discusses a penny stock and/or microcap. Such stocks are easily manipulated; do your own careful due diligence.

At the end of December, Aptose Biosciences Inc. (Nasdaq: APTO) announced that the Food and Drug Administration (FDA) in the US had granted Orphan Drug Designation to its lead development asset.

The company ran up on the back of the news, climbing from in and around $1.77 a share to highs of $2.40 – a gain of more than 35% a – before settling to post-news dip lows in and around $2.08 a piece. During the first few sessions of 2018, markets have traded up slightly on Aptose shares and the company currently goes for $2.23 and commands a market capitalization of just shy of $59 million.

That’s still a microcap, for all intents and purposes, but with the immediate reaction to the recent news now in the dust-settled phase, is there any value to be had ahead of the drug in question advancing along its development pathway in the US?

Let’s take a look.

So, the drug in question is called CG‘806 and – as an initial target disease – it’s going after acute myeloid leukemia (AML). The drug is part of a family of drugs called pan-FLT3/pan-BTK inhibitors. The mechanism of action on this one is pretty complicated but, in an attempt to simplify, AML patients often have mutations in what’s called FLT3. These mutations kick-start the oncogenic pathways that lead to the development of cancer cells and, subsequent to this development, the proliferation and spread of the same sort of AML cells.

The idea is that by inhibiting these wild-type FLT3 mutations, CG‘806 can suppress the pathways that kick-start proliferation and – in turn – can halt progression (or, even better, can reverse the severity) of the disease in question.

It’s a bit of a long shot as, while this class of drug exists, it’s never been tested in humans before and the company is carrying it forward based on a relatively limited base of non-human data.