Cellceutix Corp (OTCMKTS:CTIX) Explodes on New FDA Information

Several months ago, Cellceutix Corp (OTCMKTS:CTIX) was quietly sitting in the $1.65 to $1.75 range. The volumes were small, the press releases were not that many, and it seemed like not a whole lot of people were willing to jump in. The few who did are probably popping the champagne bottles at the moment.

The company issued some press releases in September and October, and investors started paying attention to the stock. CTIX first climbed above the $2 mark, and although it met some resistance at the $3 point, it soon managed to break through that barrier as well.

The news that triggered the run was good. CTIX announced that they have conducted some important testing of their products and said that the results are positive. The press releases were full of complicated terms, but that didn’t seem to bother the majority of investors too much.

Of course, there were some skeptics who reckoned that test results alone are never going to cut it. They claimed that without an official word from the FDA, the run is based on nothing more than hype and excitement.

If that logic is correct, there should be something more than hype and excitement at the moment. About two and a half hours before yesterday’s opening bell, CTIX announced that their Brilacidin antibiotic has received a Qualified Infectious Disease Product (QIDP) designation from the FDA.

Naturally enough, the market’s reaction to the news was instantaneous. CTIX opened the session with a surprisingly small gap up at $3.41, but once it got going, there was no turning back. Six and a half hours later, it closed the day at a whopping $4.49 (a 34% gain on its previous value) on a dollar volume of nearly $18 million.

So, lots of people jumped in, and lots of money was put on the line. Early trading today might suggest that the run is not over. About half an hour after the opening bell, CTIX is already sitting at $4.50, and the dollar volume amounts to around $1.9 million.

Clearly, investors are absolutely ecstatic about the FDA designation and judging by the buzz around the message boards and social networks, they truly believe that the stock is now in the proverbial “blue sky territory”. But does this really mean that jumping in is risk-free?

No, an investment is never risk-free, especially in Pennyland where a small piece of positive news can be turned into something huge.

The QIDP designation is definitely a significant step in the right direction, but it’s not an approval. As the press release notes, it should mean that the Brilacidin is eligible for incentive like a Fast Track designation and Priority Review which are all things that should help with the approval. But the long awaited green light will not come before the end of the Phase III trials. And that’s still a few months away.

This is somewhat worrying because a few people are already getting a bit carried away and are calling CTIX‘s Brilacidin a “game changer”. Everybody hopes that this will indeed be the case, but we’ll know if it is in due time. That’s why carefully thinking through every single move is absolutely essential.