Shares in small-cap pharmaceutical company Oxygen Biotherapeutics (OXBT) were trading up sharply on Tuesday after the announcement that the FDA was removing its clinical hold on Oxycyte, a perfluorocarbon (PFC) therapeutic oxygen carrier intended for treating traumatic brain injury (TBI).
The company’s stock gapped up almost 25 percent to $7.73 a share and climbed as high as $8.35 a share before pulling back. Volume was extremely heavy, with 6 million shares traded by 1 pm EST despite the company sporting a float of 10.62 million and an average daily volume of under 850,000 shares.
Driving the gains was the FDA’s release of Oxycyte, which opened the way once again for to progress to a Phase II-b clinical trial. The drug had previously been placed on hold over concerns about how Oxycyte was interacting with the immune system and a potential for increased risk of intracerebral hemorrhage (ICH).
Oxygen submitted data from two series of animal trials addressing these concerns in September, and the FDA announced its decision prior to market open on Tuesday.
“We are pleased that the FDA has responded favorably to the data provided and removed the clinical hold to allow further clinical development of Oxycyte,” said CEO John Kelley.
Despite the major increase in value and extremely heavy volume, Oxygen Biotherapeutics’ market cap is just north of $80 million. The company’s product pipeline is focused on therapies that help carry oxygen to tissue and also includes levosimendan, which is currently in a phase III trial for reduction of morbidity and mortality for cardiac patients at risk of low cardiac output syndrome (LCOS).
The day’s game also had Oxygen’s stock making a firmly positive breakout from a triangle pattern that had the stock going through a period of consolidation since early November. Prior to Oct. 30, the stock had been trading at around $1.40 a share, but the news of a meta-analysis of 14 clinical trials (a total of 1,155 patients) that showed levosimendan to be associated with reduced mortality. Oxygen’s stock ultimately gained more than 450 percent higher by Nov. 5.
Oxygen’s gains appear to have the company back in healthy territory. This coming less than a year after the company had to execute a 1:20 reverse stock split last May in order to satisfy Nasdaq Capital Market’s requirement that stocks trade at at least $1 a share.