The stock market was generally higher on Wednesday, with slight trading activity due to Veterans Day. Market participants continued to have high hopes for a recovery from the worst coronavirus crisis, despite the fact that the number of COVID-19 cases remained at high levels in the US and in many parts of the world.
Tech stocks generally rallied, giving that segment a much-needed boost after a significant downturn in recent days. Just before 11:30 am EST, the Dow Jones Industrial Average (DJ INDICES: ^ DJI) had increased 68 points to 29,489. The S&P 500 (SNPINDEX: ^ GSPC) rose 26 points to 3,571, and the Nasdaq Composite (NASDAQINDEX: ^ IXIC) scored 178 points to 11.732.
There is a stock that few people had ever heard of that became the big winner on Wednesday morning. At the same time, however, there is another company that has taken a step that has done it countless times before, and investors are not happy about it happening again. Below you can read more about both stocks and what their outlook looks like later on.
An excellent stock
The big winner of the day was Five Prime Therapeutics (NASDAQ: FPRX). The biotech stock rose more than 250% late Wednesday morning, after a 350% rise earlier in the session.
Five Prime is a biotech company that currently has a candidate treatment that it hopes will help in the fight against stomach cancer. The drug, called bemarituzumab, produced solid test results in a phase 2 clinical trial. Specifically, researchers looked to see if the treatment would improve progression-free survival in gastric cancer patients, as well as median overall survival and overall response rate. Bemarituzumab produced statistically significant improvements in all three endpoints.
Five Prime was clearly pleased with the positive results and noted that its strategy of targeting what is known as the fibroblast growth factor receptor 2 also shows promise in fighting other cancers. The company has found the receptor to be overexpressed in many other cancers, including certain lung, breast, ovarian and pancreatic cancers.
Five Prime partner Zai Lab (NASDAQ: ZLAB) also saw solid gains, but its much larger size limited the stock price gains to 14%. Nevertheless, the news is good for both companies, and it will be interesting to see what comes next for bemarituzumab and Five Prime’s battle against cancer.
Aurora Cannabis is going weed again
Meanwhile, shares of Aurora Cannabis (NYSE: ACB) withdrew violently from their recent profits and fell by more than 20%. The downdraft for pot stock came when the company resorted to a strategy it had used several times before, hurting shareholders every time.
Aurora decided to take advantage of the recent rise in the stock price to raise more capital through a secondary offering. After announcing the offering Tuesday night, Aurora said it had successfully priced 20 million units at $ 7.50.
Bad enough that the stock closed at $ 8.30 a share on Tuesday afternoon. What’s worse is that the units Aurora sold aren’t just stocks. Each unit contains one share plus half of a warrant to purchase additional Aurora shares at $ 9 per share, giving investors until March 2024 to decide whether to exercise their warrants.
Aurora has been relentless in diluting shareholders with repeated offers. Despite some signs that marijuana stocks could turn the corner, the unit sales to Aurora once again reminded shareholders that it may not be the best game on the market right now.