RXi Pharmaceuticals Corporation (NASDAQ: RXII)
RXi Pharmaceuticals is having an incredible start in the market today after announcing an update with regard to its candidate RXI-109. Today, we’ll talk about the RXI-109 update, how the market is reacting to the news, and what we can expect to see moving forward. So, let’s get right to it…
RXII Provides An Incredible RXI-109 Update
As mentioned above, RXII offered an update with regard to RXI-109 today, and investors are loving what they see. The update came from a blind panel and an investigator review. Between the panel and the review, results show that incision sites treated with RXI-109 after scar revision surgery were rated with increased scores when compared to control incision sites in the same patient after three months. This means that RXI-109 is likely to be proven to be effective in scar removal. In the announcement, Dr. Joseph P. Hunstad, Principal Investigator in the RXI-109 study had the following to say…
“The use of RXI-109 after scar revision surgery has a visible, beneficial effect on suppression of hypertrophic scarring as compared with untreated control scars, at three months following surgery.”
How Investors Reacted To The News
The reality is that anytime positive news comes out with regard to a publicly traded biotechnology company, we tend to see growth in the value of the company’s stock. While the news released this morning is definitely positive news, we’re seeing an adverse reaction in the market. Currently (9:49), RXII is trading at $0.50 per share after a loss of $0.04 per share or 7.61%.
Why Are We Seeing Declines Following Positive News?
It’s important to remember that the market tends to move through a series of overreactions. Yesterday after hours, those who knew news was coming pushed the value of the stock up exponentially. Therefore, when the stock opened this morning, it was already meeting resistance, causing yet another overreaction. At this point, the stock has fallen to support and is likely to move up from here.
What To Expect Moving Forward
In my opinion, it all depends on how far forward you plan to look. First and foremost, I’m expecting to see RXII move at least to the break even point today, and possibly into the green. It’s worthwhile to note that the stock is trading on incredibly high volume. According to NASDAQ, the average daily volume over the past 50 days has been 1,012,364. However, today so far, just minutes into the session 652,178 shares have already traded hands. Moving into the long run, I’m also expecting to see great things. Overall, an analyst on NASDAQ rate RXII as a strong buy with a price target above $3. While that’s a good sign, I never like to take the analysts word for it. The reality is that RXI-109 is proving to be effective in treating scars. With strong progression through the study of this treatment, things are looking promising there. It’s also important to note that RXI-109 isn’t the only treatment that RXII has in their pipeline. In fact, they have a rather large pipeline for what can be considered a low price biotech stock. This pipeline is likely to lead to vast profits in the long run. While there will be bumps in the road, as is always the case, I believe that RXII is headed for long term growth.
What Do You Think?
Where do you think RXII is headed and why? Let us know in the comments below!
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