CLDX data by YCharts

Image placeholder title

NEEDHAM, MASS. (

TheStreet

) --

Celldex Therapeutics

(CLDX) - Get Report

shares have surged 50 percent in the past two weeks because some investors are speculating the company could become (or is becoming) the next great ultra-orphan drug stock.

Investors love ultra-orphan diseases because the drugs that treat them can be priced sky high without pushback from insurance companies. The Celldex orphan disease drug candidate is known as CDX-1135 and is being developed as a treatment for dense deposit disease (DDD), a rare kidney disorder that affects approximately two people out of every 1 million worldwide.

Celldex announced dosing of the first DDD patient in a small, five-patient pilot trial of CDX-1135 on July 1. Results are expected before the end of the year.

Why would such a small trial cause investor to jump headfirst into Celldex?

Check out what Oppenheimer analyst Boris Peaker said on June 21 about CDX-1135 on June 21, right before Celldex shares took off:

While CDX-1135 remains in the early stages of development, we believe positive pilot results may lead some investors to compare CDX-1135 to other complement modulating drugs like Soliris from Alexion Pharmaceuticals (ALXN) - Get Report. However, we think that these comparisons are premature given the lack of clinical data. For reference, Soliris is approved in the US for paroxysmal nocturnal hemoglobinuria (PNH) and atypical hemolytic uremic syndrome (aHUS), and is being evaluated for a number of additional indications. Sales of the drug in 2012 topped $1.1B, and we note that Soliris is not currently being studied in DDD despite completion of Phase I testing that showed improvement in symptoms.

Peaker is probably right when he says it's a bit early to compare Celldex to Alexion, but not for many speculators in this raging biotech bull market.

Celldex is taking a breather today, down 4% to $20.36., but over the past two weeks, no bio-pharma stock has been hotter with the exception of

Onyx Pharmaceuticals

(ONXX)

, which surged because of the

Amgen

(AMGN) - Get Report

takeover attempt.

-- Reported by Adam Feuerstein in Boston.

Follow @AdamFeuerstein

Adam Feuerstein writes regularly for TheStreet. In keeping with company editorial policy, he doesn't own or short individual stocks, although he owns stock in TheStreet. He also doesn't invest in hedge funds or other private investment partnerships. Feuerstein appreciates your feedback;

click here

to send him an email.