We’re midway through the week and the biotech sector has been as active as ever so far. A combination of company specific catalysts and some macro-political factors (read: Donald Trump’s comments on drug pricing coming way, way, way down very soon) has injected volatility into the space, and given the companies that make up the sector, and by proxy, their shareholders, plenty to think about.

Here are two of the biggest movers so far this week, with a look at what is driving the action in each, and where we expect things to go near term.

The two companies we’ve got in our sights today are Pain Therapeutics, Inc. (NASDAQ:PTIE) and Pulmatrix, Inc. (NASDAQ:PULM).

So, first up, Pain Therapeutics. This one is rooted in a complete response letter (CRL) that the company picked up from the FDA in response to an NDA submission for its lead pain management asset, Remoxy ER, back in September last year. Those familiar with the pain management space is in a real mess right now in the US. Opioid abuse is at epidemic levels, and companies are scrambling to bring a drug to market that can both compete with the standard of care pain management assets (oxycodone, that sort of thing) and deter abuse. Remoxy ER is Pain Therapeutics’ attempt to do just that. It’s a sort of think gel texture (when broken down) meaning it can’t be easily inhaled, injected etc.

Anyway, markets had pretty much written the drug off when the company headed into a meeting with the FDA back in February, but the company has just announced that the agency has said it’s willing to accept an NDA resubmission (and with a potential expedited review status) if Pain Therapeutics can put together some data surrounding the abuse potential. The data is going to have to come from two separate studies, so it’s going to cost the company money, but initial estimates are that the two will only cost $3-4 million to carry out, which in the grand scheme of things, is not too expensive.

So what’s next?

Based on management expectations, the two trials should complete before the end of the year, so we’re looking for an NDA resubmission at some point early first quarter 2018. This paves the way for a mid year (under expedited review) approval for the drug, and essentially represents a complete turnaround for a company that – as mentioned – had basically been written off in the abuse deterrent sector.

We’re looking for a smooth trial run over the coming couple of quarters to facilitate data collection, and we’re looking to positive abuse deterrence data as upside catalysts ahead of the resubmission.

At last count, the Tuesday close, Pain Therapeutics was up a little over 45% on its pre announcement market capitalization.

So, next, Pulmatrix.

This one’s a little bit different, but the direction is the same. Pulmatrix ran up on Tuesday on the back of news that it has secured a patent in Europe relating to its inhalable delivery system, what’s called iSPERSE. The technology is designed to allow administration of a number of currently in use compounds, but through an inhaler, with the aim of improving potency by delivering the drug directly to the lungs. This company is surrounded by optimism right now, with the technology in question under investigation across a host of blockbuster indications, and with some having already put out really promising data indicative of efficacy. The drug, and its delivery system, has the potential to unseat some of the more established assets in their respective indications, and for a company that’s worth less than $70 million, the potential to unseat SOC in blockbuster indications is a real speculative value driver.

The latest announcement has boosted Pulmatrix circa 45%, despite it being a pretty much expected outcome. The technology already holds patents in the US and Japan, and the latest European approval is essentially a box ticking exercise.

With that said, it makes things far easier from a partnership and licensing perspective (as it opens up the potential for risk free licensing in Europe, whereas previously a licensee would have had to take on some competition risk) and that’s likely why we’re seeing the run that we are.

It’s all eyes on a licensing deal right now for Pulmatrix, so that’s what we’re looking at as driving value going forward.