CorMedix Inc. (NYSEAMERICAN: CRMD) is having an overwhelmingly strong start to the trading session this morning. However, if you go digging for press releases and SEC filings, you’re not going to find any. In fact, the company has been relatively quiet over the past couple of months. Nonetheless, there is a good reason for the gains. Today, we’ll talk about:
- Why CRMD is headed up;
- what we’re seeing from the stock; and
- what we’ll be watching for ahead.
Why CRMD Is Headed Up
As mentioned above, CorMedix is having an incredibly strong start to the trading session this morning, but hasn’t released any news or SEC filings. So, what’s the deal? The gains seem to be the result of a short squeeze as investors await a key catalyst that’s likely just around the corner. On the short squeeze side of things, short interest is down by around 7% at the moment as shorts get squeezed out of their positions, but what triggered it?
The squeeze is being triggered by a positive catalyst that’s likely around the corner. Back in July, CRMD announced the results of a Phase 3 trial after the independent Data Safety Monitoring Board completed its review. The data came from the Phase 3 LOCK-IT-100 study for Neutrolin®.
In the release, the company said that the pre-specified level of statistical significance was reached and efficacy had been demonstrated. As a result, the DSMB and the company felt that they had all they needed to move forward and terminated the study early. In the release, the company said that no safety or tolerability concerns were seen. In a statement, Khoso Baluch, CEO at CRMD, had the following to offer at the time:
We are thrilled to have received the DSMB’s recommendation that efficacy has been demonstrated. Once we have submitted the interim analysis results and DSMB’s recommendation to the FDA, we will begin the dialogue on the appropriate next steps… We have invested a significant amount of the Company’s resources over the last 2 ½ years in this study, and it is gratifying to have achieved this result based on the interim analysis. We believe Neutrolin has great potential to save lives of patients receiving hemodialysis therapy as a treatment for end stage renal disease and to lower overall healthcare costs due to reducing the risk of catheter-related blood stream infections (CRBSI).
With this news is mind, investors have been patiently awaiting the next update surrounding Neutrolin. With positive data from the Phase 3 trial, the company is likely to be reaching out to the FDA and is potentially preparing for an NDA submission. Nonetheless, with no news for a couple of months at this point, an update is due any day, and it could send the stock screaming for the top. I believe that the excitment brewing among investors as a result of the update that must be coming soon is the reason for the short squeeze we’re seeing on the stock.
What We’re Seeing From The Stock
One of the first lessons that we learn when we start to dig into the market is that emotions can caus big movement. In the case of CoreMedix, the emotion is excitement. As investors await the coming update with regard to neutrolin, they are pushing the stock into a short squeeze, leading to massive gains. As is normally the case, our partners at Trade Ideas were the first to alert us to the gains. Currently (11:00), CRMD is trading at $1.62 per share after a gain of $0.32 per share or 24.62% 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 CRMD. In particular, we’re interested in following the story surrounding Neutrolin and excited for any update that could be on the horizons. Nonetheless, we’ll continue to follow the story closely and bring the news to you as it breaks!
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