pSivida Corp. (NASDAQ: PSDV)
pSivida had an incredible day in the market yesterday, climbing more than 20% in a single trading session. However, in pre-market activity this morning, things shaping up in a way that’s not quite as positive. In fact, PSDV is currently (5:45) trading at $4.42 per share after a loss of 1.56% according to Google Finance. As a result, there are going to be tons of investors asking a big question throughout the day… Should I be concerned about declines on PSDV? Today, we’ll talk about why the stock climbed yesterday, why we’re seeing declines today and whether or not investors should be concerned.
Why PSDV Climbed In Such A Big Way Yesterday
Yesterday pSivida made a huge announcement. The Phase 3 clinical trial of Medidur has been completed, showing incredible results. Medidur is a treatment designed for consumers with chronic, noninfectious uveitis that affects the posterior of the eye, also known as posterior uveitis. Recently PSDV conducted a Phase 3 clinical trial in which 129 patients were involved. The trial was a randomized, double-blind study designed to test the efficacy and safety of Medidur. In the release yesterday, PSDV announced that the study has met both primary endpoints. Not only was Medidur proven to be safe, it was also proven to reduce recurrences of posterior uveitis and reduce intraocular pressure in those that were given the treatment. In a statement with regard to the study, the principal investigator of the trial, Dr. Glenn Jaffe, Professor of Ophthalmology and Chief of the Division of Retinal Ophthalmology at Duke University Robert Machemer had the following to say…
“The results of this Phase 3 trial are extraordinary. With a single injection, Medidur showed the ability to control the recurrence of posterior uveitis, improve visual acuity and prevent vision loss… The high level of statistical significance achieved in this trial is dramatic and, along with the compelling benefit-risk ratio, suggests an important treatment option for patients who are typically treated with repeated systemic steroids, immuno-suppressants or biologics, often facing recurring attacks of the disease as well as systemic side effects.”
Based on the above information, it’s easy to understand why PSDV climbed in the market as a result of the data that was released. Ultimately, the Phase 3 study was incredibly positive, suggesting that pSivida will likely be looking to the FDA soon for regulatory approval in the marketing and commercialization of the treatment.
Why PSDV Is Declining Today
When investing or trading, it’s important to keep in mind that price movement in the market tends to happen through a series of overreactions. While there is a clear reason for the gains we saw on pSivida yesterday, it can be argued that the 20%+ climb was a bit of an overreaction. As a result, we’re likely to see downtrends on PSDV today as investors bring the price down to a more sustainable rate before growth can continue.
Should Investors Be Concerned About The Declines?
In this particular case, I don’t think investors have anything to be concerned with. The declines that we’re seeing in the market today are nothing more than natural market movement. There has been no bad news released and there really is no reason for long term downtrends. In fact, the contrary is true. Based on the strong study results, we can expect to hear that PSDV will submit a New Drug Application with the FDA relatively soon. This news is likely to be a positive catalyst that causes another massive climb. From there, based on the strong results of the Phase 3 study, it’s likely that Medidur will be approved, also proving to be a catalyst. In the long run, we’re likely to see solid gains out of this stock. With that said, today’s slight declines will likely prove to be a strong opportunity for investors to get in on the growth frenzy at a low cost!
What Do You Think?
Where do you think PSDV is headed and why? Let us know your opinion in the comments below!
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