Vericel (VCEL) Stock: Gaining As Catalyst Approaches

Vericel Corp (NASDAQ: VCEL)

Vericel had an incredibly strong day in the market on Friday. When the opening bell rang, the stock quickly found its way to the green. From there, it seemed to keep climbing all day. In after hours, we’re seeing even more positive movement. Below, we’ll talk about what we’re seeing in the market, why, and what you should be watching with regard to VCEL ahead.

What We’re Seeing From VCEL

As mentioned above, Vericel had an overwhelmingly strong day in the market on Friday to close the week off. As soon as the session started, the stock started making a run for the top. Throughout the day, we saw more and more upward movement. By the closing bell, VCEL had gained $0.35 per share or 14.58% to close the day off at $2.75 per share. In after hours, we’re seeing more of the same. While the gains aren’t quite as large, the stock is definitely moving upward. Currently (14.58), VCEL is trading at $2.80 per share after a gain of $0.05 per share or 1.82% thus far in after-hours.

Why The Stock Is Climbing

As soon as I saw that Vericel was making a run for the top, I decided to start digging to see what was causing such strong movement. While in some cases, the research takes what seems like forever, figuring this one out took no time at all. Ultimately, the stock is climbing because a big catalyst is coming down the line relatively soon.

You see, months ago, VCEL submitted a new drug application for a treatment known as MACI. This drug is designed for the treatment of focal chondral cartilage defects in the knee. This is a major part of why the stock is climbing. After all, if MACI is approved by the United States Food and Drug Administration, the company will be able to market a product! Ultimately, this will lead to revenue and profit generation.

The reason investors are so excited now is that VCEL will be receiving the news from the FDA soon. You see, back in 1992, the United States Congress passed the Prescription Drug User Fee Act. Under this act, the FDA could collect fees from drug manufacturers to fund new drug approval. This act also stipulates amounts of time that approval should take. According to the PDUFA, the FDA has until January 3rd, 2017 to respond to the New Drug Application.

What You Should Be Watching For Ahead

Moving forward, investors should be keeping a very close eye on VCEL. After all, this could turn out to be an overwhelmingly profitable opportunity. In particular, watch for correspondence between the company and the FDA. While the clinical trials surrounding the treatment proved incredible results, often times, the FDA finds something that investigators weren’t necessarily looking at. So, at the end of the day, there’s really no telling if the treatment will be approved. Nonetheless, as the PDUFA date approaches, we’re likely to see more chatter about the topic. This chatter will likely cause movement, but the big catalyst will be when the FDA actually responds. So, make sure you’re ready to trade on January 3rd!

What Do You Think?

Where do you think VCEL is headed moving forward? Join the discussion in the comments below!

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[Image Courtesy of Wikimedia]

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