Adial Pharmaceuticals Inc (NASDAQ: ADIL) is headed up in the market today with a couple bits of news that have come out in the past 24 hours or so. Yesterday, the company announced a partnership, followed up by some offering news this morning.
All of the news seems to be heading to a short squeeze, sending the stock up like a rocket. Today, we’ll talk about:
- The recent news;
- what we’re seeing from ADIL stock as a result; and
- what we’ll be watching for ahead.
Recent News From ADIL
As mentioned above, Adial Pharmaceuticals is having a strong day in the market in what looks to be a short squeeze. So, what’s squeezing the shorts out of their positions? Well, there have been two bits of news over the past 24 hours.
First and foremost, yesterday, the company announced that it entered into a partnership with Catalent Pharma Solutions. Under the partnership, the two companies will work to advance the clinical activity related to AD04.
AD04 is a genetically targeted, investigational drug that just so happens to be the lead candidate at ADIL. The drug is being developed as an option for alcohol use disorder. This partnership ultimately brings together critical capabilities that will allow the company to begin a Phase 3 trial.
In a statement, William Stilley, CEO at ADIL, had the following to offer:
The FDA’s agreement to allow Adial to structure our Phase 3 trial of AD04 by inclusion of only genotype-positive patients significantly reduces the cost, time and risk as compared with having to enroll patients in the study that are genotype-negative for potential treatment with AD04.
Another bit of news came out of Adial Pharmaceuticals this morning, The company announced the pricing of a public offering of common stock.
The offering of 2,475,000 shares and warrants to purchase up to 1,856,250 shares of common stock is expected to drive $8 million into the company. Units of 1 share and one warrant to purchase 0.75 shares of common stock will be sold at a price of $3.25.
In general, public offerings of common stock lead to concerns, but for ADIL, it seems to be adding to the excitement. Considering that the company is expecting to move forward with a Phase 3 trial relatively soon, this additional funding will help the company advance development of AD04. So, investors seem to be taking the dilution well.
What We’re Seeing From The Stock
As investors, one of the first lessons that we learn when we start to work in the market is that the news tends to lead to moves. When it comes to Adial Pharmaceuticals, the news proved to be overwhelmingly positive. After all, the company will be commencing a pivotal trial relatively soon and now has the funds to do so.
Considering that, it’s not shocking to see that excited investors are pushing the stock into a short squeeze. After all, the faster AD04 makes it through development, the faster the company has a chance of producing meaningful revenue.
As is just about always the case, our partners at Trade Ideas were the first to alert us to the gains. Currently (10:07), ADIL is trading at $4.36 per share after a gain of $0.99 per share or 29.40% thus far today.
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What We’ll Be Watching For Ahead
Moving forward, the CNA Finance team will continue to keep a close eye on ADIL. In particular, we’re interested in following the story surrounding the company’s continued work to bring AD04 to market. Nonetheless, we’ll continue to follow the story closely and bring the news to you as it breaks!
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