Athersys, Inc (ATHX): Shorts Must Cover Where Phase 3 Looms

Matthew Paul  |

Athersys, Inc (NASDAQ: ATHX) was crushed on news of their secondary public offering of common stock , January 27, 2017.

Prior the announcement, ATHX topped off at $1.53 with an average of 400,000 shares trading. Since their announcement of a secondary offering there was a massive selloff. ATHX started the day at $1.53 and hit a low of $1.03, seeing over 11 million shares trade.

The massive selloff can be attributed to the fact the new stock was valued and sold in an IPO ( which looked like a secondary offering) at $1.01, and professional investors obviously responded to that by shorting shares at $1.53. It begs the question why the new stock is valued at $1.01, and although Equities.com reached out for comment there hasn’t been any response. Please contact the writer here at content@equities.com

The company has an interesting story to tell given they have two products beginning Phase 3, they recently announced an agreement with the FDA under Special Protocol Assessment for designing and planning an analysis of a pivotal Phase 3 clinical trial of MultiStem cell therapy for treatment of ischemic stroke (their neurological division), and MultiStem under their inflammatory and immune division .

The company is a clinical-stage biotech company developing novel and proprietary best-in-class therapies designed to extend and enhance the quality of human life. They are particularly focused on developing therapies in regenerative medicine. The company is developing “MultiStem.” It is an off the shelf stem cell product platform for multiple diseases in areas including neurological, cardiovascular, inflammatory, and immune areas. They have six clinical stage programs ranging from Phase 3 to exploratory studies.

Trading around secondaries can be tricky, specifically with Biotech and the FDA where shorts must cover prior to good news. Clearly the company intends to ramp operations into Phase 3...so this is a good story to watch.

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