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In the world of biotech stocks, one company that’s generating big buzz today is PainReform (NASDAQ:PRFX). The Israeli clinical-stage pharmaceutical company has seen its stock price absolutely skyrocket. At the time of writing, PRFX stock is now up more than 130%. However, it’s been trading at more than twice yesterday’s close for most of the day.
This significant move higher for PainReform is likely due to the successful closing of a $2.7 million offering. This registered direct offering and private placement was taken on at $9 per share, and appears to have been fully subscribed. Thus, yesterday’s closing price of $5.75 has quickly adjusted higher. Indeed, momentum investors are taking shares to more than $13 in today’s session.
Any time a biotech company is able to raise money above the market rate, that’s a good sign. Certainly, today’s move in PRFX stock indicates there’s fresh capital looking for a home in higher-growth areas of the market. And considering that PainReform has a market capitalization of around $60 million (after today’s increase), there’s plenty of upside potential where that came from, if the company can execute.
Let’s dive into what investors should make of this move today.
PRFX Stock Has Big Time Momentum Right Now
There are so many different biotech stocks for investors to choose from, it can be hard to create a watchlist of companies to focus on. My biotech watchlist continues to grow. In fact, it now includes more than 100 companies, each serving unique markets with intriguing potential therapies and drugs.
PainReform’s list of therapeutics, which are in the clinical stage of development, offer the potential for and extended period of post-surgical pain relief. Essentially, any pain emanating from a specific wound could be treated locally, allowing for more targeted pain relief for patients. Sounds like a company with a compelling future, considering the rise in surgical procedures we’ve seen coming out of the pandemic.
Notably, the company is in Phase 3 trials for one of its key drugs, PRF-110. The capital PainReform raised this week will be put into advancing its clinical trials. Accordingly, with investors looking for some positive developments out of PainReform’s drug portfolio, this capital infusion is a big deal. The fact that it took place at an above-market rate has clearly raised eyebrows, and invited other investors to jump into the fray today.
On the date of publication, Chris MacDonald did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.