The biotechnology space has been a pretty volatile arena over the last few weeks, and especially when it comes to the smaller capitalization end of the sector. Companies have put out data both good and bad, and their respective market capitalizations have subsequently altered to reflect the wider market community’s interpretation of these reports. As we near the final month of the quarter, it doesn’t look as though things are set to slow down. Here are two of the biggest movers heading into the close of this week, and what is driving the action in both.

The companies in question are Ocular Therapeutix Inc (NASDAQ:OCUL) and Argos Therapeutics Inc (NASDAQ:ARGS).

We will kick things off with Ocular.

This company just announced that the FDA has accepted a resubmission of its NDA for a drug called Dextenza. It is a development stage treatment targeting postoperative therapy for patients that have undergone cataract surgery (it’s a pretty big unmet need) but – to date – it has had a pretty rocky clinical development pathway. The company first submitted more than a year ago, but the FDA issued a complete response letter (CRL) against the initial submission. At the time, there wasn’t too much information available as to what the CRL pertains to, but the press release detailing the issue cited some manufacturing deficiencies relating to Ocular Therapeutix’s manufacturing facility.

The latest release reports the acceptance of the NDA for consideration, suggesting that the company has sufficiently dealt with the manufacturing issue, and that this shouldn’t play into the final decision as and when it comes around. It is what is called a class 2 review, which isn’t ideal, and extends the review period to six months (as opposed to the two months of a class I) and this class review system has translated to a bit of downside pressure on Ocular’s stock. The company currently sits around 8% down on its pre-announcement market capitalization. With that said, we expect it will recover heading into a newly issued PDUFA of July 19, 2017.

Moving on, let’s look at Argos.  This one is a development stage biotechnology company focusing on various oncology indications, and specifically, looking at a lead development asset called rocapuldencel-T. The company was investigating the drug as part of a phase 3 study in combination with a current standard of care treatment in its target indication (metastatic renal cell carcinoma (mRCC)).

As of yesterday, markets got word that an independent data monitoring committee has recommended that Argos discontinue development of the asset in this study, with its recommendation based on a planned interim data futility analysis. These sorts of futility analyses are relatively common (especially when it comes to oncology treatments) and they involve the data committee unblinding the data in-house and making a decision as to whether the numbers as they stand are likely to play out in favor of a drug’s efficacy or safety, or both, depending on the endpoints in question, if the trial continues. If their decision is that the drug is unlikely to hit its endpoint, they will recommend discontinuation, rooted in the idea that the patients in the trial should be offered a drug that has a higher chance of helping them, as opposed to one that doesn’t seem to be working.

As such, any such recommendation from an independent data monitoring committee is a real blow to a drug’s chances of A) completing development and B) reaching commercialization in the target indication. There is no obligation on the part of Argos to accept the committee review decision, and theoretically, the company could continue the trial through to completion. However, in this instance, it doesn’t look like it is going to, and discontinuation seems as though it is the most likely outcome. Markets are responding to this negatively (as is to be expected) and Argos currently trades nearly 70% down on its midweek pricing.

Often times, we will look at a situation like this and suggests that there may be an opportunity to get in at a discount on a market oversell. However, in this instance, it is tough see where any near-term recovery is coming from, and so for now at least, we’re going to hold out on any such forecast.