It’s been another busy start to the week in biotech, with a number of companies logging double digit gains on the back of fundamental catalysts. With the first Presidential debate set to take place later today, and the Fed looking more and more likely to raise rates near term, the fourth quarter is bound to bring huge amounts of volatility to the markets, and in particular, speculative areas like the junior biotech space. Here are two of the biggest movers over the last few sessions, and what is likely to happen to each as the political and fiscal uncertainty plays out across the next few months.
The two companies we are focusing on are Clearside Biomedical Inc (NASDAQ:CLSD) and Bioline RX Ltd (NASDAQ:BLRX)
So let’s kick things off with Clearside. This one rose into the weekend, climbing from $11.75 at Thursday’s close to reach just shy of $14 by the week’s end bell, and the gains are continuing this week. At last count, Clearside sold at $14.83 for a market capitalization of just over $304 million. At first glance, there’s no immediate reason for the gains, other than some institutional backing and an upcoming presentation. It’s the latter of these two that’s probably dominating sentiment, however, as investors are opening up speculative positions ahead of the CEO’s remarks come conference time. It’s Ladenburg Thalmann Healthcare, which is one of the top two or three dates on the healthcare space calendar, and companies very rarely show up to present anything bad. Sometimes a company will provide a corporate overview (if it’s got nothing noteworthy to discuss but wants to maintain a presence in the investment landscape). This is what is happening in this instance, so there’s only a very small chance that the conference will initiate any sort of sharp upside valuation (like it might if the presentation focused on some as yet unreleased positive data, for example) but we will likely see some steady upside if Daniel H. White, the CEO in question, can put forward a strong pitch.
The presentation is set to take place tomorrow, September 27, 2016, at 10:30 a.m. EDT in at the Sofitel Hotel in New York, NY. For those not attending, t’s going to be webcast here.
Moving on, let’s look at Bioline RX Ltd (NASDAQ:BLRX).
Bioline jumped more than 26% at the end of last week on the back of an announcement it made relating to a liver disease target. We’re not convinced that there’s any substance behind this move, however. Readers who were with us last week will remember we discussed a target indication called NASH, or non-alcoholic steatohepatitis. Specifically, we focused on the gains seen in two NASH related stocks, Galectin Therapeutics Inc. (NASDAQ:GALT) and Galmed Pharmaceuticals Ltd (NASDAQ:GLMD), which gained on the back of their association with NASH. Earlier in the week a NASH related transaction in which Allergan (NYSE:AGN) bought out Tobira Therapeutics (NASDAQ:TBRA) for a large premium, got investors very excited about the indication. As usual, in biotech, this excitement led to a lot of speculative volume, and pretty much every company with loose ties to NASH picked up a boost.
Bioline jumped on the bandwagon, and put out an announcement relating to an in licensing deal that may lead to it targeting liver disease preemptive factors – one of which is NASH. That’s all, and yet it was enough to draw near term record volume and give the company a quarter value increase across a single session. We expect this to close back up as things settle down.