Another big day in the biotech sector? You bet. Things are hotting up across the space as the final quarter approaches mid-point, and we’ve had a number of catalysts and updates hit press over the last twenty-four hours that have had an impact on their respective entities.

Here are two of the day’s biggest movers in biotech, what’s drivng the action, and what we think could come next for each. The companies in focus for Thursday are Cempra Inc (NASDAQ:CEMP) and Opexa Therapeutics Inc (NASDAQ:OPXA).

First up, Cempra.

This one is a bit of a tough situation for shareholders. The company took a more than 60% hit across yesterday’s session on the back of the release of some briefing documents from the FDA, which addressed the safety of its lead development asset, solithromycin. Specifically, the discussion (which took place as part of an advisory panel meeting last Friday) focused on the drug’s impact on the liver of patients, and whether this impact was enough to weigh on the risk side of the risk benefit analysis enough to negate its chances of approval.

The core point of the discussion, and the sentence on which the downturn seen in yesterday’s markets is rooted, is this:

“We conclude that these findings comprise a genuine liver injury signal.”

Now, the degree to which this conclusion will affect the FDA’s decision is unclear. It may simply be a case of labeling to warn patients, or to try and inhibit prescription to patients that have underlying liver conditions, which may be exacerbated by administration.

If the latter, we expect the company to recover when the FDA settles into its final ruling. If the agency demands more safety data, however, which is a distinct possibility, it could weigh on this recovery.

This being said, a 60% decline is very harsh on something that (in our opinion) looks as though it could be fixed with labeling. Let’s see what happens.

Next up, Opexa.

This one isn’t too much of a surprise. The company just announced that it is set to reduce its workforce by more than 40% near term, in an attempt to rein in costs following the development failure (and in turn, discontinuation) of its candidate Tcelna.

The drug was under investigation as part of an efficacy target program looking at patients with secondary progressive multiple sclerosis (SPMS). The condition is a considerable unmet need with very few options to even treat symptoms, and if Opexa could get a candidate through to a pivotal, and beyond to commercialization, there would have been plenty of upside on offer heading into 2017. Unfortunately, however, and despite what looked like promising data from preclinical and early stage clinical studies, the drug failed to demonstrate efficacy when it advanced to phase II, and the company decided to ditch it.

Not a great outcome for shareholders, and a real shame for sufferers of the condition, but the operational implications of ditching a top tier pipeline candidate such as this are predictable. Cost cutting, and by proxy, layoffs.

The company is down 20% on Wednesday’s session, adding to the already seen decline post trial outcome announcement.

We don’t expect too much of a reprieve for this one near term.