To find a winner in the biotech this week, all you’d need to do is throw a dart at a basket of microcaps. Sub $100 mm juniors have – pretty much across the board – soared on the back of a low float, speculative volume surge, and there’s plenty to be had in the sector still. Opexa Therapeutics Inc (NASDAQ:OPXA) gained in excess of 119% on Monday. RXi Pharmaceuticals Corp (NASDAQ:RXII) picked up close to 50% gains, on volume that came in at a 138X multiple of trailing three months. Mirna Therapeutics Inc (NASDAQ:MIRN) is up 26% on the session, buoyed by volume at 24X average.
It’s not just the micros that have moved, however. Some of the small to mids have also picked up gains, while others have taken a hit on fundamental disappointments. Here are two companies that have moved this week – Mast Therapeutics, Inc. (NYSE:MSTX) and Acorda Therapeutics Inc (NASDAQ:ACOR).
Let’s kick things off with Mast.
This one is relatively straightforward.
The company closed out the session on Monday up almost 30% on the week’s open, as management put out a press release detailing a potential reverse merger. The news hasn’t particularly come as a surprise – the rumor mill has been flogging the suggestion for the pats month or so – but that the company has now reinforced the rumors, to some degree, has served as an upside catalyst.
The reinforcement came by way of the above mentioned press release, detailing the fact that Mast has:
“…received several written indications of interest from privately-held companies, including companies with synergistic clinical-stage drug candidates, and is actively evaluating these opportunities.”
Exactly how this will play out remains to be seen, but the logical assumption is that a reverse merger would allow the company out spin out some of its less favorable assets at relatively low forward cost, and potentially pick up an exposure to a promising asset from another junior’s pipeline in the process.
It’s all speculation right now, so we’re keeping an eye out for some degree of clarification before forming a bias one way or the other.
Next, Acorda.
This one’s more of a classic biotech move. The company put out the news on Monday that it was discontinuing the development of its drug Ampyra (dalfampridine) for an expanded indication of post-stroke walking difficulties (PSWD). Those familiar with the landscape will already be aware that Acorda already picked up an approval for this one, as part of a license and development deal with Alkermes Plc (NASDAQ:ALKS), in a similar indication but in patients with MS, as opposed to post-stroke.
The drug was under investigation as part of a trial that compared it to placebo in the target group, and while the results (once unblinded) showed a small positive difference in the active arm when compared to control, it was far from being stat sig, and so for now at least, post stroke is off the menu.
The company fell a few percentage points on the news, but it’s not too much of a blow, since markets had already priced in the likelihood of failure, and the fact that there’s potential for a decent chunk of revenues on the MS side of the equation.
Next in line for Acorda is a Parkinson’s target called CVT-301, and this is probably going to become the major sentiment driver for the company moving forward. A little farther down its pipeline is a migraine candidate, and a dementia in Parkinson’s patients candidate. Both of these latter mentioned will have their chance in the spotlight if the company can carry them through to late stage, and both are blockbuster targets if they get there.
