Trading penny stocks is a risky enough game, to begin with, but biotech penny stocks, another ball game. Investors look to invest in penny stocks because their returns can be out of this world. However, nothing compares to a penny stock powered by strong news. The reason shares of biotechnology companies can be so lucrative is the many potential news catalysts.
What Happened With These Biotech Penny Stocks?
ContraVir Pharmaceuticals Inc. (CTRV Stock Report) is a biotechnology company that has had a price explosion on June 6th. ContraVir is primarily focused on the treatment of chronic liver disease.
They announced positive results for its CRV431 treatment of liver fibrosis. It was shown to significantly reduce fibrosis in a second animal model. This prompted the stock to shoot up 150% from $5.03 to $14.08.
“In addition, this study showed that CRV431 reduced fibrosis where OCA, a drug approved for PBC with potential to treat additional liver diseases, such as NASH, did not. Therefore, CRV431’s superior efficacy profile in this model is very promising and is especially exciting given CRV431’s additional anti-viral and anti-cancer properties we have demonstrated in other preclinical studies. We will continue to study additional models of fibrosis in preparation for future NASH clinical trials.”Dr. Robert Foster, CEO of ContraVir
An Opposite Instance
On June 5th, another biotech penny stock received heavy negative news and the company’s stock price plummeted (see: This Penny Stock Was $37 Yesterday). InflaRx (IFRX Stock Report) had never traded below $10 until they released devastating news regarding their clinical trial for IFX-1.
Their treatment did not report a statistically significant difference from the placebo treatment. This resulted in InflaRx’s stock to fall down to below $5 from its previous close at around $37.
It is very evident how influential clinical trial news is for biotechnology companies. Investors should be very careful when trading these stocks. Regardless of whether it is mid-cap or small-cap, penny stock news can make or break an investors bank account.