Alterity Therapeutics Ltd (NASDAQ: ATHE) is screaming for the top in the market this morning, but if you’re looking for press releases or SEC filings that may act as the catalyst, you’re not going to find anything. The last press release issued by the company came a couple of months ago.
Nonetheless, investors are chatting about the company’s ATH434 drug candidate, suggesting that big news is on the horizon. Here’s what’s going on:
Alterity Therapeutics Gains On ATH434
All of the Alterity Therapeutics chatter seems to be centered around ATH434, the company’s lead clinical candidate. The candidate is the first of a new generation of small molecules that have been designed to inhibit the aggregation of pathological proteins implicated in neurodegeneration.
Across social media, we’re seeing messages surrounding a coming report of new findings being presented at the American Academy of Neurology. According to various reports, the presentation will surround the drug’s ability to treat Parkinsonian disorders.
Investors are pointing to recent data from an animal model of Multiple System Atrophy. In the model, the drug was found to protect brain cells and increase motor function of those with Parkinsonian diseases. Importantly, there are no approved treatments on the market for Multiple System Atrophy, making this an incredibly high value indication.
Why The Stock Is Climbing So High
Take a look at the ATHE stock chart and you’ll see that it’s up around 20% this morning. Those are pretty significant gains, even for a company that’s presenting data on an exciting candidate relatively soon. So, what’s driving the extent of the move and will the stock go higher?
At the moment, Alterity Therapeutics trades with atoub 18 million shares outstanding. While that may sound like quite a bit of shares, it’s actually a drop in the bucket. In fact, investors would look at the stock as an ultra-low float stock.
When a stock has a low float, it means that the shares available to the public are in short supply. As the law of supply and demand suggests, when an asset in short supply sees a sudden and significant increase in demand, the price must rise.
All of the social chatter surrounding the company’s coming data presentation seems to be driving a significant increase in demand for shares. In fact, by volume, it’s one of the most active stocks on the market this morning.
With such an increase in supply and such a low float, the fact that we’re seeing significant gains is no surprise. Moreover, these significant gains have the potential to continue, making what we’ve seen thus far nothing more than the tip of the iceberg.
The Bottom Line
The bottom line here is simple. Alterity Therapeutics seems to be onto something in an indication that has no approved treatment options. So, the long term opportunity here is hard to ignore.
That, combined with the short term opportunity driven by high demand for a low-float stock, make ATHE stock one that’s hard to ignore.