Inflarx (IFRX) Stock Is Squeezing the Shorts

Inflarx NV (NASDAQ: IFRX) is screaming for the top in the market this morning. While the company released positive data yesterday, the market reaction was underwhelming to say the least. Nonetheless, the market seems to be noticing the news today as the stock makes a more than 70% run for the top. Here’s what’s going on:

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IFRX Stock Has Delayed Reaction to Data

In the press release issued yesterday, Inflarx announced positive data from the third cohort of patients in its Phase IIa open-label study with vilobelimab in Pyoderma Gangraenosum, also known as PG. 

According to the release, six out of seven patients, or 85.7% of patients, showed clinical remission and closure of target ulcer in the highest dose cohort. Moreover, treatment was well tolerated and no dose-related adverse events were observed. 

IFRX went on to explain that final post treatment observational data will be available in the first half of next year. 

Management Commentary

In a statement, Dr. Korinna Pilz, Chief Clinical Development Officer at IFRX, had the following to offer:

We are happy to see more patients responding with the highest dose of vilobelimab in patients with Pyoderma Gangraenosum. There is a need for better treatment options for this painful and debilitating condition. With the good safety profile and promising efficacy results we have seen in this trial, we will seek FDA guidance on next steps towards a pivotal program.

Why the Delayed Reaction?

There’s no telling exactly why the market’s reaction to the data was delayed. However, the gains are definitely taking place today. There are two main drivers to the high volume gains outside of the data. First and foremost, algorithmic trading seems to be latching onto this stock, leading to significant computerized trading volume. 

Beyond the algorithmic trading, the stock is known for pretty significant short interest. As a result, retail investors are seeing an opportunity for a massive short squeeze, leading to even more gains. 

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The Bottom Line

The bottom line here is that not only was the data positive, the technical metrics on this stock suggested a big run was ahead. So, as algorithmic traders and retailers dive in, the stock could continue skyward. 

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