After an incredibly strong day in the market yesterday, Alliqua Biomedical Inc (NASDAQ: ALQA) is making yet another impressive run in the market today. The gains have to do with news that the company released yesterday morning with regard to a spinoff and merger. Today, we’ll talk about:
- Why ALAQ is running today;
- what we’re seeing from the stock; and
- what we’ll be watching for ahead.
Why ALQA Is Running For The Top
As mentioned above, Alliqua Biomedical is having yet another strong day in the market today, following up on the gains seen on the stock yesterday. The gains are ultimately the result of an announcement that the company will be spinning off AquaMed Technologies.
Once the spinoff is complete, AquaMed, ALQA said that AquaMed will be merged with a privately held annabinoid-based pharmaceutical company, known as TO Pharmaceuticals. The combined company will go by the name TO Pharma and will focus on creating novel therapeutics based on TOP’s proprietary cannabinoid product platform.
Once the merger is complete, ALQA shareholders will retain a minority stake in TO Pharma with TOP holding the majority. The new entity also intends to list shares of common stock on the NASDAQ. In a statement, Dave Johnson, CEO at ALQA, had the following to offer:
We are extremely excited to form this exciting new company in a fast-growing sector of the market… TOP is a leader in the cannabinoid therapy space, and we look forward to creating TO Pharma as a global leading cannabinoid pharmaceutical therapy-based company.
With the news in mind, the stock ran early on in the market yesterday before gains started to taper off. Today, it seems as though investor excitement is building around the story yet again, leading to further gains.
It makes sense too. The spinoff will allow Alliqua Biomedical to focus its management team’s efforts on core products. However, shareholders of ALQA lose nothing. Instead, they gain ownership of a newly formed entity that will likely trade on public markets. All in all, this is a match made in heaven.
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. In the case of Alliqua Biomedical, the news proved to be overwhelmingly positive. After all, with the new entity formed and the spinoff, investors are provided with an immediate return of value while the company now has the ability to focus its abilities on its core assets. So, it’s not surprising to see that gains are continuing today. At the moment (9:51), ALQA is trading at $3.38 per share after a gain of $0.72 per share or 27.07% so far today.
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What We’ll Be Watching For Ahead
Moving forward, the CNA Finance team will continue to keep a close eye on ALQA. In particular, we’re interested in watching the spinoff as well as the company’s moves once the transaction is complete. Nonetheless, we’ll continue to follow the story closely and bring the news to you as it breaks!
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