Shares of the microcap biotech Spruce Biosciences just had their best day on record after it said the Food and Drug Administration had granted it a special designation that would allow its rare-disease drug to move through the review process quicker.

The stock rallied 1,378% Monday to close at $121.58 after several trading pauses for volatility. It gained another 79% to $233.80 in morning trading Tuesday.

While that sounds dramatic, it isn't unheard of among clinical-stage pharma companies. Drugmakers at that stage of development typically don't generate any revenue and operate at a loss as they spend money to develop medicines, making them a risky but potentially hugely rewarding bet for investors.

Spruce is focused on therapies for neurological disorders with significant unmet medical need. It is currently developing a treatment of Sanfilippo Syndrome, or MPS IIIB. It is an ultrarare and fatal genetic disease affecting the brain and spinal cord, leading to deteriorating neurological function.

The FDA granted Spruce a so-called Breakthrough Therapy Designation, meaning that the review process for Spruce's treatment of Sanfilippo Syndrome, called tralesinidase alfa enzyme replacement therapy, or TA-ERT, will be significantly streamlined. This designation is typically granted for drugs that could demonstrate a substantial improvement over available therapies.

"We are pleased to receive U.S. FDA Breakthrough Therapy Designation as we prepare to submit the Biologics License Application of TA-ERT for the treatment of MPS IIIB in the first quarter of 2026," said CEO Javier Szwarcberg.