While penny stocks can fly to new highs in a matter of hours, they can sink just as fast. This has never been truer than for biotech penny stocks. Due to large amounts of news, these stocks can either thrive on positive news or get pummeled on negative penny stock news. The most recent culprit of devastating news is Savara Inc. (SVRA Stock Report).
“Disappointingly, with the placebo effect stronger than anticipated, the study did not meet its primary endpoint.”Rob Neville, CEO of Savara
Savara Inc. is a biotechnology company zeroed in on orphan lung disease. Currently, they have a few drugs in their pipeline including Molgradex and AeroVanc. On June 12th the company announced results regarding their Molgradex treatment. In its Phase III trial, the study failed to meet its primary endpoint of an alveolar-arterial oxygen gradient.
Savara Inc. (SVRA) Shares Nosedive
To say this news was bad is putting it mildly. Savara’s stock price has almost never been below $5 besides its very early market days. This trial news, however, has knocked the stock all the way down from $10.15 to $2.56 in a day. It is very rare that a stock drops 75% in a single trading session.
Because this is now a biotech penny stock, they could still bounce back on future strong news. Savara still has other drugs that can succeed as Aerovac mentioned. Furthermore, the company is going to continue to improve upon Molgradex and only view this as a minor setback.
“However, we remain encouraged about the results of IMPALA, most notably the significant improvement in SGRQ, the consistency of trends and improvements seen across the endpoints and the favorable safety profile. We are preparing to meet with the FDA and EMA to discuss the results from this study and to determine our options to seek approval based on the current data, and potentially conduct an additional study incorporating the learnings from IMPALA. It is with much gratitude that we acknowledge the patients participating in the study. It is on their behalf that we will continue to pursue our goal of bringing this important therapy to market.”Rob Neville, CEO of Savara