Why Action on Nivalis Therapeutics, Inc. (NASDAQ:NVLS) Is Unsurprising

Nivalis Therapeutics, Inc. (NASDAQ:NVLS)

Nivalis Therapeutics, Inc. (NASDAQ:NVLS) shares have been up over 23% on heavy volumes. Average daily volume is listed at 412,440 but by 2:30 PM EST, NVLS shares had traded hands over 5.6 million times. So why the keen interest by traders? The company had a well reported Phase 2 failure for its lead drug candidate cavosonstat, a cystic fibrosis treatment, back in January. After that Nivalis set up a board to explore “strategic alternatives”. The market seems to believe that, even without any formal news, something is afoot.

Latest reports put the company’s cash level at over $60 million – that is over $4/share for a stock that is trading barely over $3. The cash level is important because beyond that fact Nivalis Therapeutics, Inc. (NASDAQ:NVLS) did observe some positive results in their failed Phase 2 trial. The first was that the drug was safe and well-tolerated by the patients. The second was that the patients showed an increase in their weight and body mass. This has led to a continuance of the trial to determine what benefits may be found in patients with a different medical profile than the first trial. In short – there may be some, as yet, undiscovered value in Nivalis Therapeutics, Inc. (NASDAQ:NVLS)’s lead drug candidate.

Nivalis Therapeutics, Inc. (NASDAQ:NVLS) is trading below its cash levels. Top-line results for their lead drug candidate in the continued Phase 2 trial are expected to be released this month. Nivalis Therapeutics, Inc. (NASDAQ:NVLS) is also pursuing strategic alternatives which is often a euphemism for a sale, merger, licensing agreement, or private investment. When you combine those three factors are see that NVLS is trading +60% below its recent highs, it is not so questionable as to why NVLS is experiencing heavy volumes without any reported news from the company.

3/14/2017
Ticker Symbol NVLS
Last Price a/o 2:55 PM EST  $                      3.05
Average Volume                    412,450
Market Cap (mlns)  $                    44.41
Sales (mlns) $0.00
Shares Outstanding (mlns) 15.21
Share Float (mlns) 13.97
Shortable Yes
Optionable No
Inside Ownership 0.20%
Short Float 2.32%
Short Interest Ratio 0.79
Quarterly Return 38.39%
YTD Return 30.36%
Year Return -40.16%

I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 96 hours. All information, or data, is provided with no guarantees of accuracy. 

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.

Author: Marcus Anderson

Marc has a degree in economics and a MSc. in Finance. Marc worked for global investment firms in Europe and the United States as an analyst, fund manager, and consultant.

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