Aehr Test Systems (NASDAQ:AEHR)

Aehr Test Systems (NASDAQ:AEHR) Receives $2.7 Million Purchase Order

Aehr Test Systems (NASDAQ:AEHR)

Shares of Aehr Test Systems (NASDAQ:AEHR) gained 11% after the worldwide supplier of semiconductor test and burn equipment announced a $2.7 million follow-on order. The purchase order is for the supply of the company’s OX-XP system, multiple DiePak® Carriers. In addition to the $2.7 million order, Aehr Test System has reported a 31% increase in Q1 revenue.

AEHR Stock Performance

Investors reacted to the news by pushing the stock to $3.52, which happens to be a key resistance level, in a falling trend line. Should Aehr Test Systems (NASDAQ:AEHR) rise above the $3.60, it could make a push to $4, which happens to be another key resistance level.

While Aehr Test Systems (NASDAQ:AEHR) is up by more than 10% for the year, it is still down by more than 30% from its April highs of $6 a share. The stock has been trading in a downtrend in recent months after struggling to rise above the $5 a share mark.

Aehr Test Systems (NASDAQ:AEHR)

The $2.7 million order should strengthen investor confidence on the stock as it continues to bounce back from multi-year lows.

The contract validates FOX –XP system unique capability of delivering thousands of test resources that has made it appropriate for volume test/burn in production.

“We are excited to receive these additional follow-on orders from this large multinational customer for their production test/burn-in requirements. The new orders build on an existing device test/burn-in implementation at this customer now moving into volume production, which continues to expand our production presence for multiple generations of devices,” said CEO Gayn Erickson.

Aehr Q1 Earnings

The $2.7 million FOX-XP orders follow reports that Aehr Test Systems (NASDAQ:AEHR) generated net sales of $7 million for the first quarter of 2017, up from $5.3 million reported the previous year. Non-GAAP net income came in at $226,000 or $0.01 a share compared to a net loss of (-$436,000) for the corresponding period last year.

During the quarter, the company received a $900,000 order for the supply of additional testing capability and power handling capacity to test and burn-in new silicon photonics. Late last month the company announced a volume production order worth more than $3 million

Taking into consideration the $2.7 million order, Aehr Test Systems (NASDAQ:AEHR) entered the second quarter with a backlog of $18 million.

I have no positions in any of the stocks mentioned, and have no plans to initiate any positions within the next 72 hours. All information, including any data, is provided without any guarantees of accuracy.

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About the author: Marc has a degree in economics and a MSc. in Finance. Over his 20-year career, Marc has worked for global investment firms in Europe and the United States as an analyst, fund manager, and consultant.

Tuesday Morning Corporation (NASDAQ:TUES)

Tuesday Morning Corporation (NASDAQ:TUES) – Push For CEO Ousting

Tuesday Morning Corporation (NASDAQ:TUES)

Tuesday Morning Corporation (NASDAQ:TUES) shares jumped 11.1% after the off-price retailer reaffirmed its FY2018 outlook. The retailer expects same-store sales to increase 2% – 5% in addition to a significant improvement in EBITDA. The company expects its first-quarter sales to increase by the same amount.

Disappointing Financial Results

Shares of Tuesday Morning Corporation (NASDAQ:TUES) broke through a key resistance level, on the embattled retailer reaffirming its full year and first quarter sales. The remarks support the uptrend that began last month after the stock had plunged to multi-year lows. However, the stock is still down by more than 50%, year to date.

Tuesday Morning Corporation (NASDAQ:TUES)

The off-price retailer is under pressure to survive at the backdrop of a vicious retail environment that continues to dent its prospects. The retailer has already relocated 52 stores, opened 21 and expanded 13, as it continues to explore ways of accelerating sales growth.

Tuesday Morning Corporation (NASDAQ:TUES) felt the wrath of Wall Street after reporting a severe decline in earnings for the better part of the year. For the fourth quarter, the company says it generated a net loss of (-$17.1) million which led to a full year net loss of $32.5 million.

Management Changes

The underperformance has already led to calls for the resignation of the current Chief Executive Officer, Steve Becker. Jeerddi II LP and Purple Mountain Capital Partners LLC which own 2.4% of the company are pushing for management changes. The two firms are pushing for the appointment of Michael Barnes as the new CEO to replace Becker.

The board of directors has remained firm; refusing to cave into pressure from the two stockholders. Two hedge funds have since threatened to publicly nominate Barnes and Purple Mountain founder James Corcoran for the board. Calls for the firing of the current CEO comes on the heels of his appointment to the position.

“It is regrettable that Jeerddi has chosen to disregard the company’s progress and, instead, propose what we believe is an ill-advised director slate while pursuing a disruptive and protracted proxy fight at the expense of all Tuesday Morning stockholders,” said Terry Barman, chairman of the company’s board of directors.

Tuesday Morning Corporation (NASDAQ:TUES) will hold its annual general meeting on November 15, where shareholders are to vote for members of the board of directors.

I have no positions in any of the stocks mentioned, and have no plans to initiate any positions within the next 72 hours. All information, including any data, is provided without any guarantees of accuracy.

Don’t miss out! Stay informed on $TUES and receive breaking news on other hot stocks by signing up for our free newsletter!

About the author: Steve Clark is a 23-year Wall St professional with stints in M&A, risk management, and algorithm trading. Steve keeps his head in the game by looking for, and writing about, small companies that often get overlooked by the big investment firms.

Alliance MMA Inc. (NASDAQ:AMMA)

Alliance MMA Inc. (NASDAQ:AMMA) Acquires Victory Fighting Championship

Alliance MMA Inc. (NASDAQ:AMMA)

Shares of Alliance MMA Inc. (NASDAQ:AMMA) gained 87.5% after the mixed martial arts company announced the acquisition of Victory Fighting Championship. The acquisition follows a strong second quarter in which the company reported a 48% increase in revenues.

Alliance MMA Inc. (NASDAQ:AMMA) is currently trading in an uptrend after reaching a key support level at $1.80. However, it is still down by more than 30% for the year after dropping from the $4 a share mark.

Alliance MMA Inc. (NASDAQ:AMMA)

Acquisition

The VFC acquisition is an aggressive move as the company has produced more than 60 live MMA events since 2002. A global distribution network has broadcasted its events in over 155 countries. The acquisition should thus allow Alliance MMA Inc. (NASDAQ:AMMA) to achieve multiple strategic goals.

“VFC’s organizational footprint, in terms of scale and distribution on UFC FIGHT PASS, provides an incredible opportunity for Alliance MMA to produce content – including live content – that fans want to see,” said CEO, Paul Danner.

Alliance MMA Inc. (NASDAQ:AMMA) should be able to expand its footprint and operations into more geographies with the acquisition. According to Mr. Danner, plans are underway to launch in several new cities by leveraging VFC’s unique brand of entertainment. The company already operates in 13 of the top 30 Nielsen Designated Market Areas.

The mixed martial arts company is on course to host eight events this month as it closes in on its goal of hosting at least 125 MMA events per year. This month’s lineup features numerous title bouts in top markets including cities in Midwest, Northeast South, and West.

Push For Positive Cash Flow

Alliance MMA Inc. (NASDAQ:AMMA) should be able to build on its second quarter earnings momentum given the roster of events in the pipeline. The company is on track to achieve a positive cash flow thanks to a 48% increase in Q2 revenues.

Solid execution of the electronic platform CagTix.com and a strong performance by the fighter management firm, SuckerPunch Entertainment, led to a 14% increase in operating margin. During the quarter, the company raised approximately $1.5 million. Alliance MMA Inc. (NASDAQ:AMMA) plans to use the amount to finance acquisitions, needed to further grow the brand.

“Our strong second quarter operating results reflect impressive gains in each of the most important key performance indicators for an enterprise at our stage of development,” said Mr. Danner.

I have no positions in any of the stocks mentioned, and have no plans to initiate any positions within the next 72 hours. All information, including any data, is provided without any guarantees of accuracy.

Don’t miss out! Stay informed on $AMMA and receive breaking news on other hot stocks by signing up for our free newsletter!

About the author: James Marion is a University of Houston student studying Business with a concentration in Finance. James has interned with several investment professionals and hopes to pursue a career as a professional stock analyst after graduation.

Catabasis Pharmaceuticals Inc. (NASDAQ:CATB) Gains on DMD Presentations

Catabasis Pharmaceuticals Inc. (NASDAQ:CATB)

Catabasis Pharmaceuticals Inc. (NASDAQ:CATB) resurgence from all-time lows continued in Thursday’s trading session as its shares gained 21.9% to end the day at $2.23 a share. The rally followed the announcement that the clinical stage biopharmaceutical company will present results from a joint research collaboration with Sarepta Therapeutics Inc. (NASDAQ:SRPT).

Catabasis DMD Presentation

The presentation touches on a research collaboration for Duchene Muscular Dystrophy (DMD). The two companies are currently investigating CAT-1004, a known NF-Kb inhibitor, known to enhance myotube formation in-vitro.

In addition, Catabasis Pharmaceuticals Inc. (NASDAQ:CATB) will present results from an open-label extension of the MoveDMD trail, following five weeks of edasalonexent treatment in boys with DMD.

Shares of Catabasis closing above the $2 could be the catalyst needed to push the stock to the $2.50 mark, another key resistance level. CATB has underperformed the overall industry after losing more than 40% in market value since the start of the year. The clinical stage biopharmaceutical company is still trading in a downtrend even with the recent resurgence.

Catabasis Pharmaceuticals Inc. (NASDAQ:CATB)

Catabasis Q2 Earnings

Catabasis Pharmaceuticals Inc. (NASDAQ:CATB) bounce follows a second-quarter earnings report that showed substantial progress in trimming its net loss. For the three months ended June 30, 2017, the company reported a net loss of (-$7) million or (-$0.32) cents a share, down from a net loss of (-$9.4) million reported in Q2 2016.

Research and development expenses dropped to $4.5 million from $6.8 million a year ago, attributed to the completion of certain clinical activities. Headcount reductions led to a decline in General and Administrative expenses that totaled $2.4 million compared to $2.6 million as of Q2 2016. Catabasis Pharmaceuticals exited the quarter with cash and cash equivalent of $29.4 million compared to $31.8 million as of March 31, 2017.

“In the second quarter, we presented an important prespecified crossover analysis of data from boys with Duchenne in our Phase 2 edasalonexent trial. We are very excited to see improvements in the rate of decline of muscle function across multiple assessments in boys treated with edasalonexent for 12 weeks,” said CEO Jill C. Milne.

Catabasis Pharmaceuticals Inc. (NASDAQ:CATB) is also working on CAT-5571 a potential oral treatment for cystic fibrosis.

I have no positions in any of the stocks mentioned, and have no plans to initiate any positions within the next 72 hours. All information, including any data, is provided without any guarantees of accuracy.

Don’t miss out! Stay informed on $CATB and receive breaking news on other hot stocks by signing up for our free newsletter!

About the author: Monica has an undergraduate degree in Accounting and an MBA she earned – with Honors. She has six years of experience in the financial markets and has been an analyst for the past two years.

Massive Bounce for Zynerba Pharmaceuticals Inc (NASDAQ:ZYNE)

Zynerba Pharmaceuticals Inc (NASDAQ:ZYNE)

Zynerba Pharmaceuticals Inc (NASDAQ:ZYNE), a clinical-stage specialty pharmaceutical company, announced positive top line results from an open label exploratory Phase 2 Trial. ZYNE shares are up over 70% from yesterday’s close of $6.19 and have reached as high as $11.28 in early trading. Volume for the biotech firm’s shares is exceptionally heavy. Typically ZYNE share will trade almost 65,000 shares per day, however over 815,000 shares exchanged hands just thirty minutes into today’s trading session.

Zynerba Pharmaceuticals Inc (NASDAQ:ZYNE)

Industry Reaction

Steven Siegel, MD, PhD Professor and Chair, Psychiatry and Behavior Sciences, Keck School of Medicine of USC. “Fragile X is a challenging genetic autism spectrum disorder, with complex symptomatology that significantly impacts patients and their families. Many children with Fragile X and their families struggle with the lack of approved drugs to safely treat their symptoms. This study suggests that ZYN002 is ready for the next phase of development, and I believe that this drug holds great promise as a potential treatment for these very difficult-to-treat symptoms.”

ZYNE Stock

Zynerba Pharmaceuticals Inc (NASDAQ:ZYNE) stock has greatly underperformed both the indexes and industry this year. YTD, ZYNE stock was down over 60% and down over 66% for the quarter. What will be of note to traders is the action of the large number of shares held short – over 20% of the number of outstanding shares is represented by short sellers.

Roth Capital recently upgraded their ratings of ZYNE stock from a “Neutral” to a “Buy”. Six other investment firms downgraded Zynerba Pharmaceuticals Inc (NASDAQ:ZYNE) shares in 2017.

I have no positions in any of the stocks mentioned, and have no plans to initiate any positions within the next 72 hours. All information, including any data, is provided without any guarantees of accuracy.

Don’t miss out! Stay informed on $ZYNE and receive breaking news on other hot stocks by signing up for our free newsletter!

About the author: Marc has a degree in economics and a MSc. in Finance. Over his 20-year career, Marc has worked for global investment firms in Europe and the United States as an analyst, fund manager, and consultant.

Avinger Inc. (NASDAQ:AVGR)

Avinger Inc. (NASDAQ:AVGR) Awarded CE Mark

Avinger Inc. (NASDAQ:AVGR)

Shares of Avinger Inc. (NASDAQ:AVGR) more than doubled in value after the company announced its system for the treatment of in-stent restenosis, Pantheris® Lumivascular atherectomy has been awarded a Conformité Européenne (CE) marking designation. The stock was up by 119% to end Wednesday’s trading session at $0.46 a share.

Avinger Inc. (NASDAQ:AVGR)

AVGR Stock Performance

However, Avinger Inc. (NASDAQ:AVGR) continues to trade near all-time lows after plunging from its January highs of $3.50 a share.

The CE mark which validates the use of the in-stent restenosis system in Europe could be the catalyst that will help push the stock up from the current lows. Demand for alternative treatment options for the condition, which normally results in narrowing of blood vessels, is on the rise.

“CE Marking for this particular indication is an important milestone for Avinger that addresses an area of unmet clinical need for patients suffering from PAD. Onboard image guidance coupled with directional plaque excision offers the interventionist clear benefits when treating in-stent restenosis and represents another opportunity to improve patient outcomes,” said CEO, Jeff Soinski.

Class Action Lawsuit

However, Avinger Inc. (NASDAQ:AVGR) remains the subject of increased scrutiny on Wall Street over claims that certain officials failed to fulfill their fiduciary duty to shareholders on or around January 30, 2015. A class-action lawsuit filed by Bronstein, Gewirtz & Grossman, and LLC alleges that the Registration Statement and Prospectus that Avinger used for its Initial Public Offering contained materially false and misleading statements.

The lawsuit goes on to claim that Avinger Inc. (NASDAQ:AVGR) did not have an adequate sales and marketing personnel needed to accelerate sales growth for the lumivascular platform products. The law firm also alleges that the company failed to notify investors that it was experiencing problems with the robustness of the lumivascular platform devices.

Bronstein, Gewirtz & Grossman, LLC claims that Avinger failed to disclose that physicians and hospitals were demanding more extensive and comprehensive training before they bought the company’s products.

The filling of the lawsuit follows the share price decline in Avinger Inc. (NASDAQ:AVGR from $13, as of the IPO date, to current lows of $0.46 a share. The class action lawsuit seeks to recover the damages that shareholders incurred on the company providing misleading statements.

I have no positions in any of the stocks mentioned, and have no plans to initiate any positions within the next 72 hours. All information, including any data, is provided without any guarantees of accuracy.

Don’t miss out! Stay informed on $AVGR and receive breaking news on other hot stocks by signing up for our free newsletter!

About the author: Steve Clark is a 23-year Wall St professional with stints in M&A, risk management, and algorithm trading. Steve keeps his head in the game by looking for, and writing about, small companies that often get overlooked by the big investment firms.

Immune Pharmaceuticals Inc. (NASDAQ:IMNP) Positive Phase 2 Trial

Immune Pharmaceuticals Inc. (NASDAQ:IMNP)

Immune Pharmaceuticals Inc. (NASDAQ:IMNP) shares jumped 16.67% after the company announced positive preliminary results from a Phase 2 trial of moderate to severe bullous pemphigoid. Clinical trial results indicate that the company’s candidate drug bertilimumab reduced total activity score of the condition by 85%.

Immune Pharmaceuticals Inc. (NASDAQ:IMNP)

IMNP Investor Reaction

Investors reacted to the news by pushing the stock to $2 a share before it dropped to end Wednesday’s trading session at $1.40 a share. The rally came at the backdrop of a strong selling pressure that has engulfed the stock for the better part of the year.

Immune Pharmaceuticals Inc. (NASDAQ:IMNP) stock has underperformed the overall industry after shedding more than 50% since January. The company has already received a notice from the NASDAQ Capital Markets warning of a potential delisting from the exchange.

NASDAQ Compliance Warning

According to the NASDAQ, the company is no longer in compliance with the minimum equity requirement after stockholder’s equity dropped below $2.5 million. Immune Pharmaceuticals has also been taken to task for not meeting compliance rules requiring a minimum market cap of $35 million and a net income of $500,000.

Immune Pharmaceuticals Inc. (NASDAQ:IMNP) has since been given until October 6, 2017, to submit a plan on how it plans to regain compliance. Failure means it could be delisted from the exchange.

Bertilimumab Prospects

Positive mid-stage clinical trial results for severe bullous pemphigoid appears to have shrugged off concerns about the company’s woes. Focus shifting to the company’s candidate drug for the condition bertilimumab could help strengthen the company’s sentiments on Wall Street.

“If bertilimumab can substantially reduce or perhaps even eliminate the need for systemic corticosteroids in the treatment of bullous pemphigoid and their significant toxicity in this elderly population, it will be a major step forward in the management of what is the most common blistering disease,” said Dr. Neil Korman.

According to Chief Executive Officer, Elliot Maza, the positive preliminary results validate Immune Pharmaceuticals Inc. (NASDAQ:IMNP) strategy of focusing human capital and financial resources on the candidate drug. The company plans to enroll 12 to 15 patients into a Phase 2 Open-label BP trial as it continues to develop the novel treatment.

I have no positions in any of the stocks mentioned, and have no plans to initiate any positions within the next 72 hours. All information, including any data, is provided without any guarantees of accuracy.

Don’t miss out! Stay informed on $IMNP and receive breaking news on other hot stocks by signing up for our free newsletter!

About the author: Marc has a degree in economics and a MSc. in Finance. Over his 20-year career, Marc has worked for global investment firms in Europe and the United States as an analyst, fund manager, and consultant.

Remark Holdings, Inc. (NASDAQ:MARK) Seven Figure Contract

Remark Holdings, Inc. (NASDAQ:MARK)

Shares of Remark Holdings, Inc. (NASDAQ:MARK) gained 7.93% after one of China’s largest state-owned enterprises awarded the company’s subsidiary, KanKan, a seven-figure contract. The contract is for the supply of facial and object recognition technology to a Shanghai municipal health agency.

Remark Holdings, Inc. (NASDAQ:MARK)

MARK Stock Performance

Wednesday’s rally helped reverse a sell-off that had pushed Remark Holdings, Inc. (NASDAQ:MARK) from $4.20 to$3.60. Remark Holdings, Inc. (NASDAQ:MARK) has underperformed the overall industry after struggling to rise above January trading levels. It awaits to be seen if the seven-figure contract is the catalyst that will help push the stock to new highs. MARK has a 52-week high of $4.87 a share.

The technology utilizes artificial intelligence to ensure food service workers wear hats and masks all the time. KanKan is to install the technology in 200 restaurants as part of the trial phase ahead of a potential expansion to 2,000 facilities.

“This contract shows that we are able to monetize our artificial-intelligence technology, including facial and object recognition,” said Kai-Sheng Tao, Remark Holding’s Chairman and CEO, “and it sets the foundation for us to potentially triple our business with the city of Shanghai in 2018 and expand to most of the eight million restaurants located in cities throughout China.”

Remark’s Revenue Growth

The KanKan Artificial Intelligence platform has been a key driver of Remark Holdings, Inc. (NASDAQ:MARK)’s revenue. With the unit meeting and surpassing expectations, Mr. Tao remains confident of the company meeting its revenue and growth metrics for the year.

For the three months ended June 30, 2017, Remark Holdings, Inc. (NASDAQ:MARK) generated revenues of $17.3 million, compared to $15 million reported last year. Revenue for the first six months of the year totaled $32.6 million compared to $29.2 million last year.

Net loss for the quarter dropped to (-$4.3) million or (-$0.19) a share from (-$5.4) million or (-$0.27) a share as of the second quarter of 2016. Net loss for the first six months of the year nearly halved to (-$4.3) million from (-$7.8) million as of last year.

I have no positions in any of the stocks mentioned, and have no plans to initiate any positions within the next 72 hours. All information, including any data, is provided without any guarantees of accuracy.

Don’t miss out! Stay informed on $MARK and receive breaking news on other hot stocks by signing up for our free newsletter!

About the author: James Marion is a University of Houston student studying Business with a concentration in Finance. James has interned with several investment professionals and hopes to pursue a career as a professional stock analyst after graduation.

Tantech Holdings Ltd (NASDAQ:TANH)

Tantech Holdings Ltd (NASDAQ:TANH) Issues Shares To Institutional Investors

Tantech Holdings Ltd (NASDAQ:TANH)

Chinese clean energy firm Tantech Holdings Ltd (NASDAQ:TANH) has disclosed that it has signed a securities acquisition deal with a number of institutional investors. Shares of Tantech Holdings consequently fell by 32.94%. Under terms of the deal, Tantech Holdings will receive $6.5 million in a direct placement. Each common share will be priced at $3.45 and investors will be issued 1,891,307 shares. Additionally, investors will also receive warrants which will allow them to acquire 945,655 common shares at $4.25 a share.

Tantech Holdings Ltd (NASDAQ:TANH)

Tantech Holdings Ltd (NASDAQ:TANH) will use the proceeds of the offering for general corporate purposes. It is expected that the placement could be completed on September 29, 2017 if customary closing conditions are met.

Electric vehicles

Tantech Holdings Ltd (NASDAQ:TANH)’s securities purchase agreement comes barely over a week since the Chinese clean energy firm announced that its motor vehicle subsidiary had obtained $20 million in sales contracts for electric buses and vans.

“This new sales contract, along with the recent MIIT approval of two of our EV models, laid a solid foundation for us to gain market share in the fast growing Chinese EV segment,” said the Chief Executive Officer and chairman of Tantech Holdings Ltd (NASDAQ:TANH), Zhengyu Wang.

The sales contracts are for the purchase of 10 electric buses and 450 electric. Tantech also revealed that the buyer had made a deposit in order to lock in the price. The buyer will also be required to pay about 30% of the sales price November 2, 2017. The balance is to be paid upon delivery which is expected before the end of this calendar year.

Leading market

Both the electric van and the electric bus have received the approval of the Chinese authorities. The van, suited for tourist uses and airport transportation, has a capacity of 34 passengers while the bus is suited for urban transportation and has a capacity of 46 passengers. Both the electric bus and the electric van possess a driving range of 155 miles or 250 kilometers on a single charge.

The Chinese motor vehicle market is enormous and growing at a fast rate. Last year more than 28 million automobiles were sold and this number is expected to rise to an annual figure of 40 million motor vehicles within three years. This rapid growth has led to massive air pollution that is associated with internal combustion engines and the government has been keen to respond by developing the electric car sector.

I have no positions in any of the stocks mentioned, and have no plans to initiate any positions within the next 72 hours. All information, including any data, is provided without any guarantees of accuracy.

Don’t miss out! Stay informed on $TANH and receive breaking news on other hot stocks by signing up for our free newsletter!

About the author: Steve Clark is a 23-year Wall St professional with stints in M&A, risk management, and algorithm trading. Steve keeps his head in the game by looking for, and writing about, small companies that often get overlooked by the big investment firms.

Axovant Sciences Ltd (NASDAQ:AXON)

Axovant Sciences Ltd (NASDAQ:AXON) Alzheimer’s Treatment Flops

Axovant Sciences Ltd (NASDAQ:AXON)

Pharmaceutical firm Axovant Sciences Ltd (NASDAQ:AXON) has disclosed that development for a trial Alzheimer’s drug would be halted after it failed to meet its endpoints. Consequently shares of the company fell by 74.7% to settle at $6.13 on Tuesday – a record low.

According to the New York-based firm, there was no difference between a placebo and the drug (known as intepirdine) in the trial involving 1,150 participants. The trial measured the ability of trial participants to carry out regular daily activities such as bathing and dressing. The drug did not affect brain power significantly.

Axovant Sciences Ltd (NASDAQ:AXON)

5-HT6 antagonists

Intepirdine was meant to be taken daily. It is in the class of treatments known as 5-HT6 antagonists. These drugs work by assisting in the release of acetylcholine by blocking 5-HT6 receptors. Acetylcholine is a neurotransmitter which is required in order to perform normal cognitive activities. The failure has raised doubts over whether the mechanism has potential in the development of Alzheimer’s treatments.

“Following a slew of failures with other 5-HT6 receptor antagonists, Axovant Sciences Ltd (NASDAQ:AXON)’s intepirdine put the nail in the coffin for the mechanism in Alzheimer’s disease,” Brian Skorney an analyst at Baird wrote in a research note.

Alzheimer’s is the most common type of dementia. In the United States it affects approximately 5.5 million people. Earlier in the year Lundbeck, a pharmaceutical firm based in Denmark, revealed that the late-phase trials of a similar drug using the same mechanism had failed to meet the endpoints as well. Other pharmaceutical companies that have failed to develop an Alzheimer’s drug include Merck and Eli Lilly.

Consistent failure

Over the years drug companies have invested billions of dollars trying to find a treatment for Alzheimer’s since the potential global market for a cure is 44 million-strong. So far only four Alzheimer’s drugs have received U.S. Food and Drug Administration (FDA) approval. The last time the FDA greenlit a new Alzheimer’s drug was 14 years ago. According to some analysts and doctors, pharmaceutical firms are conducting trials without having a full understanding of the science behind the disease.

Axovant Sciences Ltd (NASDAQ:AXON) did not develop intepirdine from the ground up and had actually bought the rights from GlaxoSmithKline three years ago at a price of $5 million. The pharmaceutical startup went public a year later in 2015 achieving a valuation of close to $3 billion. At the time questions were raised over the lofty valuation given that it was based on a drug which in the hands of the previous owner, GSK, had flopped consistently in trials.

I have no positions in any of the stocks mentioned, and have no plans to initiate any positions within the next 72 hours. All information, including any data, is provided without any guarantees of accuracy.

Don’t miss out! Stay informed on $AXON and receive breaking news on other hot stocks by signing up for our free newsletter!

About the author: Monica has an undergraduate degree in Accounting and an MBA she earned – with Honors. She has six years of experience in the financial markets and has been an analyst for the past two years.