BioCryst Phamaceuticals (NASDAQ: BCRX)
Shares of BioCryst Pharmaceuticals Inc. took a hit on Monday after they released news of disappointing mid-stage study results for avoralstat, a potential treatment for a rare genetic condition that produces swelling in the face and airways called angioedema. Given 3 times a day the goal was to reduce the amount of attacks on patients vulnerable to angioedema while monitoring side effects, however, there was no significant data that proved a reduction in the attacks. This weak data is what traders and investors are focusing as shares plummet in the premarket. Pharmaceuticals can be very volatile so if you are looking to trade it make sure to mind your exit points and position size. Currently analysts have an average price target of $15.22 but we should see some downgrades over the next couple of days with this recent trial data and it looks like JP Morgan is the first to do so. JP Morgan downgraded BCRX to a Neutral from Overweight and slashed its target price from $16 to $5, a 68% decrease.
“OPuS-2 was a well-designed and executed trial that gave us a clear answer; this dosage form of avoralstat is not a viable formulation to move forward,” CEO Jon Stonehouse said in a statement on Monday. “While we are disappointed in the study results, we learned that meaningfully better exposure is needed for avoralstat to succeed.” (TheStreet)
The stock was down nearly 60% in the premarket trading session and never seemed to recover throughout the day. After hitting premarket lows of $2 on high volume, shares flat lined throughout the day before closing at $1.78 with most of the major trading taking place in the premarket. Shares closed Friday at $6.14 and have been on a downtrend dating back to July of 2015 when they peaked out at $16.83. Shares have fallen 88% since and with this recent news they probably won’t be making a strong recovery anytime soon. Looking back on the daily chart you can see that shares have maintain prices in the low teens for much of last year with a couple of dips below the $10 mark. The break below the major support level of $8 increased the pressure to the downside and eventually trade to $6 before plummeting on weak trial data. Right now there isn’t much of an argument to be long. We would need to wait and see how further testing goes to determine if taking a position long would be worth the risk.
BioCryst Pharmaceuticals, Inc. is a biotechnology company that designs, optimizes and develops novel drugs that block key enzymes involved in the pathogenesis of diseases with its focus on therapeutic areas with unmet medical needs. It integrates the disciplines of biology, crystallography, medicinal chemistry and computer modeling to discover and develop small molecule pharmaceuticals through the process known as structure-guided drug design. The company was founded in 1986 and is headquartered in Birmingham, AL. (MarketWatch)