IsoRay, Inc. (NYSEAMERICAN: ISR) had an incredibly strong day in the market yesterday, closing the day with more than 100% gains on news of FDA clearance. However, today, the stock is falling, giving back a good chunk of those gains. So, what’s happening? Today, we’ll talk about:
- The FDA clearance;
- why the stock is falling today;
- what we’re seeing from ISR; and
- what we’ll be watching for ahead.
ISR Announces FDA Clearance
As mentioned above, IsoRay had an incredibly strong day in the market yesterday after the company announced news surrounding an FDA clearance. In a press release issued late in market hours yesterday, the company announced the receipt of FDA 510(k) regulatory clearance surrounding the brachytherapy technology known as GammaTile™ Therapy. GammaTile™ Therapy incorporates the company’s proprietary Cesium-131 seed within customizable collagen-based carriers for the treatment of recurrent brain tumors.
In the release, ISR reminded investors that its wholly owned subsidiary and GT Medical Technology executed a collaborative development agreement as well as an exclusive ten-year supply agreement surrounding the treatment in the past. In a statement, Matthew E. Likens, President and CEO at GT Medical Technologies had the following to offer:
We are very excited that our partnership with IsoRay Medical has resulted in this new opportunity to provide an innovative solution for the hundreds of thousands of patients with recurrent brain tumors… As we worked to gain approval, GammaTile Therapy was implanted in over 100 patients in an IRB- approved study at the Barrow Neurological Institute in Phoenix, AZ. We believe that experience will be a solid foundation for us to expand access to this important advancement in brain tumor therapy.
The above statement was followed up by Lori Woods, Interim CEO at ISR. Here’s what she had to offer:
GammaTile Therapy utilizes Cesium-131 brachytherapy seeds to deliver a fast-acting therapeutic dose to the tumor bed… The unique properties of Cesium-131 have started to revolutionize brain brachytherapy treatment, and GammaTile Therapy should help to accelerate the adoption of these procedures. We look forward to working closely with GT Medical Technologies to support access to this critical treatment for patients with recurrent brain tumors.
Why The Stock Is Falling
While ISR had an incredible day in the market yesterday, the same can’t be said for the action we’re seeing surrounding the stock today as it spirals downward. So, what’s the deal? Well, the declines are two-fold:
- Normal Market Movement – Any time we see big movements toward the top in the market, investors tend to get cold feet, especially after gains over 100%. So, the following day, we tend to see declines in the stock. Of course, we expect that this is part of the declines we’re seeing today.
- Offering – Another bit has to do with an offering that was announced late yesterday. In a release, IsoRay announced a registered direct offering of 11,000,000 shares of common stock at a purchase price of $0.75 per share. It is expected that the offering will generate gross proceeds in the amount of $8.25 million. Also, the company has agreed to issue to the investors unregistered warrants to purchase up to 5,500,000 shares of common stock. IsoRay said that it intends to use the net proceeds from the offering for working capital and general corporate purposes with a particular focus on marketing the brain applications and Build-Blu™ delivery system for real-time prostate brachytherapy. Nonetheless, while there is a good reason for the funding, dilution is a concern to investors. Helping to drive the stock downward today.
What We’re Seeing From The Stock
At the end of the day, ISR has been in the midst of a roller coaster ride, gaining in multiples yesterday only to see declines today. Nonetheless, the movement is for good reason on both sides of the fence as investors weigh the risks and rewards here. Of course, our partners at Trade Ideas were the first to alert us to the movement. At the moment (9:13), ISR is trading at$ 0.68 per share after a loss of $0.39 per share or 35.98% 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 ISR. in particular, we’re interested in following the news surrounding the commercialization of GammaTile following the announcement of FDA approval. We’ll also be watching for news with regard to the Build-Blu platform and excited to see the growth ahead following the declines that we believe will be a short blip on the screen. Nonetheless, we’ll continue to follow the story closely and bring the news to you as it breaks!
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