Aevi Genomic Medicine Inc (NASDAQ: GNMX) is having a strong trading session in the market today. However, if you go digging for news, you’re not going to find any. No press releases or SEC filings have been issued. Nonetheless, there’s a relatively good reason for the gains. Today, we’ll talk about:
- Why GNMX is headed up;
- what we’re seeing from the stock; and
- what we’ll be watching for ahead.
Here’s Why GNMX Is Headed Up
As mentioned above, Aevi Genomic Medicine is having a strong day in the market today, but no news has been released. So, what’s the deal? Well, to get an understanding for today’s gains, you have to see the entire picture. So, we’ll start with some news that was released late last week.
In a press release, the company announced that its ASCEND trial failed to meet its primary endpoint. Through the trial, the company was assessing AEVI-001 as a treatment for ADHD in children between ages 6 and 17. Unfortunately, while GNMX did prove that the treatment was safe and well tolerated, the company was unable to show efficacy. Of course, this sent the stock tumbling down. In a statement, Michael F. Cola, CEO at GNMX, had the following to offer:
We are very disappointed that the ASCEND trial did not achieve its primary endpoint… We plan to conduct a full review of the data with our scientific advisers in the coming days and consider our options. We want to thank the investigators, study coordinators and the entire Aevi team for their hard work on this innovative study. We also especially want to thank the patients and their families for their participation. We remain committed to our mission of bringing novel targeted therapies to children with serious rare and orphan disease. We will continue to focus on our pipeline of additional molecules, including AEVI-002 for severe pediatric-onset Crohn’s Disease and AEVI-005 for an undisclosed autoimmune orphan disease, both partnered with Kyowa Hakko Kirin. In the near-term, we anticipate reducing the scope of our operations to preserve our net working capital, which was approximately $5 million (unaudited) as of December 31, 2018.
In the statement, we find clear clues as to why the stock is headed up. Sure, there was a failed clinical trial, and that led to some serious pain for investors as the stock tumbled. However, the company is doing what it can to retain its capital and its value. While GNMX is down, the company is not out. Investors are essentially seeing value in the rest of the company’s pipeline. If they’re right, the recent clinical failure-related declines could represent an opportunity for gains ahead.
What We’re Seeing From The Stock
One of the first lessons that we learn when we start to work in the market is that the news leads to moves. When it comes to Aevi Genomic Medicine, the news proved to be overwhelmingly negative, leading to declines. However, with remaining assets, some investors see the stock as highly undervalued. So, it’s not surprising that the stock is headed up today. As is normally the case, our partners at Trade Ideas were the first to alert us to the gains. Currently (12:10), GNMX is trading at $0.25 per share after a gain of $0.029 per share or 13.32% thus far today.
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What We’ll Be Watching For Ahead
Moving forward, the iWatch Markets team will continue to keep a close eye on GNMX. In particular, we’re interested in following the story surrounding the company’s continued work to develop treatments from its current pipeline and how the company downsizes to ensure that the capital lasts long enough to make it to catalystic events. Nonetheless, we’ll continue to follow the story closely and bring the news to you as it breaks!
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