Flex Pharma Inc (NASDAQ: FLKS) is having an overwhelmingly strong day in the market today. Generally, we say it’s for good reason, but in this case, there is no good reason that the stock should be headed up. Today, we’ll talk about:
- Why FLKS is likely to tank;
- what we’re seeing from the stock today;
- and what we’ll be watching for ahead.
FLKS Is Flying, But It Will Fall
As mentioned above, Flex Pharma is having an incredibly strong day in the market today after massive declines seen on the stock yesterday. The declines were the result of a press release announcing a business update. In particular, the company announced that it would be ending two ongoing Phase 2 clinical trial investigations. One of these investigations was looking into FLX-787 for the treatment of amyotrophic lateral sclerosis (ALS) and the other was assessing the treatment in Charcot-Marie-Tooth (CMT). Unfortunately, the company announced that there were oral tolerability concerns observed in both studies, in a subset that was being treated. In a statement, Bill McVicar, Ph.D., President and CEO at FLKS, had the following to offer:
In the past few months we have reported positive efficacy data in two serious and distinctly different neurological diseases: multiple sclerosis (MS) and ALS. We believe that these clinical data demonstrate the clear potential of FLX-787 as a symptomatic therapy to reduce painful cramps and spasms in these patient populations… However, recent observations of oral intolerability at the current dose and formulation, in a subset of patients, in both studies, indicate that more formulation and dose-ranging studies are required, which is challenging for the Company based upon our current resources.
Considering the overwhelmingly negative news, there’s absolutely no reason that the stock should be seeing gains today. Nonetheless, after the massive declines, traders saw opportunity, and are sending the stock climbing.
What We’re Seeing From The Stock
As mentioned above, as traders saw an opportunity to pump the price of Flex Pharma up before dumping it for a profit, the stock is flying in the market today. Of course, our partners at Trade Ideas were the first to alert us to the gains. Currently (10:06), FLKS is trading at $1.54 per share after a gain of $0.50 per share or 48.08% 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 FLKS. In particular, we’re interested in following the story surrounding the company’s recent spike and we’ll be watching for a fall back down to reality. We’re also watching for the company’s plans following the news of the closure of the two clinical trials. Nonetheless, we’ll continue to follow the story closely and bring the news to you as it breaks!
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