Bad Phase 3 Results Bring Evoke Pharma Inc (NASDAQ:EVOK) Down To The Ground
tags: EVOK
This week is shaping up as a total nightmare for the stock of Evoke Pharma Inc (NASDAQ:EVOK) and all its supporters. Starting with a gargantuan 73% fall on Monday, Evoke is still digging deeper and deeper with no end in sight. So how long does the stock look poised to continue the negative trend?
That is a good question for a start. After all, the biotech’s managers could hardly have expected anything other than a huge nosedive following the announcement of unfavorable Phase 3 results at the beginning of the week. A couple of hours into today’s session, EVOK is worth exactly $1.92 per share, down 4.5% from its yesterday’s close and has lost a whopping 81% of its value over the course of this week alone. Last Friday, EVOK closed trade at $10.38 per share, only slightly less than the 52-week high of $11.11 it scored just two days earlier. Ironically enough, the last two weeks have come up at the complete opposite ends of the spectrum, at least as far as Evoke’s chart performance is concerned. Could this disastrous outcome have been avoided, though?
Hardly. The reason is pure and simple – when a clinical trial goes that far and things go south at the eleventh hour, just a few steps away from the finish line – the number of options grows thin. In this respect, there is little management could have done to prevent the firestorm. Not only did the latter come to pass, it also evaporated every single gain EVOK had made on the charts since the beginning of 2016.
According to CEO Dave Gonyer, the results of its EVK-001 drug have taken everyone by surprise as managers believe in the drug’s promising treatment opportunities. Management’s optimism about the product candidate’s potential to provide efficient treatment options, on the one hand, and the favorable results recorded at earlier stages of the trial, on the other, both had an inflating impact on Evoke’s stock price. Because of that, the magnitude of EVOK‘s subsequent plunge has yet to be fully digested and the real evaluation of all the damage suffered by stockholders is yet to be quantified.
With management reportedly planning to conduct further analyses to understand why the results failed to reach the primary endpoint of the Phase 3 study, EVOK shares might continue to lose ground before a rebound takes place. Anyway, such a rebound will inevitably be contingent upon both good news from those further analyses and patience on behalf of affected stockholders, if the latter are willing not to run out of it in the meantime.
