News-Driven Volume Surge for Cellceutix Corp. (OTCBB:CTIX)
Volatility was the order of the day for Monday as the stock of Cellceutix Corp. (OTCBB:CTIX) picked up speed in early trading and gained as much as 28 cents before noon, with furious volume immediately after the open. The company shifted nearly eight times its average daily volume as the price soared. However, in the late afternoon CTIX tumbled and fell below its previous close, then managed a close just 1% up.
The volume surge was caused by a news release that hit the wire yesterday morning, informing the public that CTIX completed the assets acquisition of bankrupt PolyMedix. The acquired assets include both the product pipeline of PolyMedix as well as their material assets located in their laboratories. Information regarding the acquisition was also posted as an 8-K filing. The deal cost CTIX $2.1 million in cash and an additional 1.4 million shares. It should also be noted that in the acquisition process, CTIX assumes no portion of PolyMedix debt.
Traders were obviously excited about the news and jumped onto the stock immediately after the open. After the stock added 15% in a matter of hours, the volume spikes cooled down and the movement slowly reversed. The acquisition news is generally a positive for the company and CTIX may potentially have a major winner on their hands with their own Kevetrin anti-cancer compound but the drug is still in Phase 1 testing and bears all the risks associated with early treatments.
The company has managed to steer clear of heavy dilution over the last couple of years but at the same time the ongoing research and development costs, and subsequently – net losses, are piling. Investors should of course do their own due diligence on the company and the sector competition.
The OTC market was focused on medical and biopharma stocks yesterday, with InVivo Therapeutics Holdings Corp. (OTCBB:NVIV) continuing their climb on strong volume, ending the day another 14% up. Medical Marijuana, Inc. (OTCMKTS:MJNA) had a good volume day too, closing nearly 4% up.