Eleven Biotherapeutics (EBIO): Up 40%; Short Cover or Bright Future?

Bolton Flautt  |

One of the most active stocks from the small cap space today has been Eleven Biotherapeutics (EBIO) after its announcement this morning discussing a favorable news event. Shares of EBIO were up 38 percent at $1.40 per share on very heavy volume of 16 million shares. EBIO has a market cap of $27.6 million and an average daily volume of 1,655,940 shares. The company has a 52-week range between 0.25 and $13.64 per share. This type of activity looks like short covering seeing that the stock was down 88 percent for the year a week ago.

EBIO is a preclinical-stage biopharmaceutical company with a proprietary protein engineering platform, called AMP-Rx, that it applies to the discovery and development of protein therapeutics to treat diseases of the eye.

EBIO has plenty of cash to continue doing business and bring a sellable product to market. As of December 31, 2015, the company had cash and cash equivalents of $36 million. There really isn’t much more to mention from a financial basis with a company that is pre-revenue like EBIO.

The favorable news announced earlier today was focused on the recent Phase 3 trials by EBIO that found that patients with certain genetic patterns were more likely to respond favorably to its eye drop product. This news comes as a blessing for shareholders after two trial failures last month resulting in the aforementioned downward spiral for EBIO where its stock price dipped all the way down to $0.32 per share.

We will keep an eye on EBIO and update you as more trials are undertaken. The Cambridge, Massachusetts based company has 21 employees and has been in business since 2008. The company also has a enough education in its Key Executive team to start a reputable university -- five doctors to boot. The real question is “Can they can transition all that brain power into a healthy bottom line and marketable product?” We shall see…

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