Shares of Carlsbad’s Isis Pharmaceuticals (NYSE: ISIS) surged on Tuesday evening and Wednesday after the company announced positive results from phase 2 testing of a proposed treatment for diabetes.
The surge came after Isis revealed that its experimental drug, ISIS-GCGRRx, had successfully reduced blood sugar level in test subjects suffering type 2 diabetes who were experiencing uncontrolled blood sugar levels despite receiving standard treatment.
Between Tuesday’s close on Wall Street and the first hour of trading Wednesday morning, Isis stock surged more than 11 percent, rising from $25.09 to $27.92. But during the next hour, profit-taking set in so that by noon Eastern time, the stock was hovering around $26 -- still more than 3.5 percent above the previous day’s close, while the rest of the Nasdaq board remained flat.
The announcement led the Piper Jaffray investment house to list Isis as one of its top stock picks, with a target price of $42, although it cautions that more data is needed to see how effective the drug is, noting that other Isis glucose treatments have had issues in the past.
But the firm added that Isis has other attractive assets as well, ranging from a treatment of a rare form of hypercholestorol to a proposed treatment for amyloidosis, a nerve disease that causes pain, numbness and muscular weakness.
Wednesday’s stock surge represents a turnaround for the company, which has fallen 40 percent since March. In a column on Tuesday before the diabetes announcement was made, the Motley Fool investment site said there was no particular event to blame for the decline, and instead suggested that Isis had been “a victim of the wider biotech downturn that hit companies valued more for their clinical, rather than commercial pipeline, particularly hard.” It suggested that Isis might be selling at bargan prices.
1896 Rutherford Road
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