Disc Medicine has best day in 4 years as its blood-disorder drug succeeds in trial

Mid-cap biotech Disc Medicine soared around 40% on Monday, its biggest one-day gain since late 2022. Following a successful trial, the company announced plans to resubmit its application for approval of a drug to treat a rare genetic disease that causes extreme sensitivity to sunlight. Earlier this year, U.S. health regulators rejected the application, stating that it needed more data.

Disc shares jumped 39% on the Nasdaq on Monday to $78.90 apiece. That marked their biggest one-day gain since late 2022, Barron’s notes. The rally followed the company’s announcement of positive results from a phase III clinical trial of bitopertin. The drug is being developed to treat erythropoietic protoporphyria, a rare inherited disease in which the buildup of a toxic substance causes extreme sensitivity to light.

The current standard of care involves measures to avoid sunlight, including restricting outdoor activities to nighttime, using protective clothing and opaque shields, and managing pain, according to the press release. Scenesse is approved for adults in the U.S. to help increase the time they can spend in light without pain.

The bitopertin trial showed that levels of the toxic substance fell around 46% in patients taking the drug, versus just 4.4% in the placebo group. Crucially, patients taking bitopertin averaged 41.4 hours in sunlight without pain in the sixth month of treatment, versus 28.9 hours for those taking a placebo, Barron’s notes.

“We could not have hoped for a better outcome,” CEO John Quisel said in the press release. Disc plans to resubmit its application for FDA approval of bitopertin by the end of this year, with the management expecting a decision by mid-2027.

The results address key shortcomings identified by the FDA in Disc’s previous attempt to secure approval, Barron’s writes. In autumn 2025, the biotech received a Commissioner’s National Priority Voucher from the FDA. The voucher allows drug developers to shorten the review of an approval application to 1-2 months from the usual 10-12 months.

However, in February this year, the FDA rejected bitopertin, determining that there was insufficient evidence linking reductions in the toxic substance to clinical improvements. The decision sent Disc stock plunging 22% in a single day and forced the company to announce plans to cut its workforce by 20%.

After Monday’s close, Disc announced plans to raise $350 million through a follow-on offering of common stock and pre-funded warrants. The company intends to use the proceeds for R&D and preparations for a potential commercial launch of bitopertin.

Following Monday’s clinical results announcement, two Wall Street analysts raised their target prices on Disc: Cantor Fitzgerald increased its TP 36% to $170 per share, implying 115.5% upside, while BMO Capital lifted its TP 20% to $120 per share, implying 52% upside. Both investment banks maintained their recommendations to buy the stock. Disc has 13 “buy” calls from Wall Street analysts and no other ratings, according to MarketWatch data. The average target price of $121.50 per share implies 54% upside from Monday’s close.