The Axcella Health Inc (NASDAQ: AXLA) stock price fell 10.60% after yesterday’s massive 52.97% rally triggered several trading halts by the Nasdaq Global Market. The rally was triggered by massive investor interest in the company’s stock, but it seems to have subsided today, given the decline witnessed in AXLA's stock price.
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The last significant announcement from Axcella Health was regarding its reverse stock split that became effective on September 18, 2023. The company got shareholder approval for a 1-for-25 reverse stock split to boost its share price and regain compliance with the NAsdaq’s listing rules.
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Before the reverse stock split, Axcella had been granted a patent for its long COVID-19 fatigue treatment on August 29, 2023. The company is focused on pioneering a new approach to address the biology of complex diseases using compositions of endogenous metabolic modulators (EMMs).
At the time, the company revealed that the U.S. Patent and Trademark Office (USPTO) had granted U.S. Patent No. 11,737,999, covering methods of use of candidate AXA1125. The drug candidate is intended to treat subjects who have post-acute sequelae of COVID-19 (PASC), also known as long COVID, especially fatigue.
The patent has an expiration date of 2042 and was issued on August 29, 2023. AXA1125 is a novel composition of EMMs designed to concurrently support inflammatory, metabolic and fibrotic pathways linked to fatigue. Axcella has been awarded previous patents related to AXA1125.
Returning to the reverse stock split, we can see that the price action following the reverse stock split was not encouraging as the AXLa stock price had been falling since September 13, 2023, and into the September 19 reverse stock split up to yesterday when we got a slight rally.
Given the lack of fundamental triggers behind yesterday’s rally, it is evident that the higher rally could be a dead cat bounce, which usually implies that even the most oversold stock can rally briefly before falling again.
However, I was expecting a multiple-day rally and was quite disappointed to see just a one-day rally. It remains to be seen whether Axcella stock can rally higher again.
Axcella Health (AXLA) stock price.
Axcella Health (AXLA) stock price fell 10.60% to trade at $9.45, from Thursday’s closing price of $10.57.
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