The market has gone crazy for shares of Prima Biomed Limited (ASX: PRR), sending the stock as much as 77% higher after the global biotechnology group announced positive trial results for a potential ovarian cancer vaccine. The stock was trading 59% higher at the market's close.
The company, which boasted a market capitalisation of just $31 million prior to today's announcement, said that patients who were treated with the CVac vaccine had a significantly better chance of survival.
Commenting on the results, the company's chairwoman Lucy Turnbull said: "This final clinical data for CVac is most encouraging for cancer patients in second remission… Our concerted focus will now be to find a development partner to make CVac widely available to cancer sufferers around the world."
Should you get on board the biotech train?
Prima Biomed isn't the only biotech group to have soared in price with Pharmaxis Ltd. (ASX: PXS) and Sirtex Medical Limited (ASX: SRX) both having skyrocketed in value recently. As these three stocks have demonstrated, those exposed to the sector can make gains on the back of strong trial results or successful new drugs, but there is also an enormous level of risk involved.
Companies within this sector can just as easily plummet in value, making many of them a dangerous option for long-term 'Foolish' investors to consider. While you could look to put a small amount of cash to work in the sector in the hope of striking gold, you would be wise to limit your exposure and maintain a diversified portfolio at all times.
A much safer bet than Prima Biomed
