Epizyme Had A Volatile Session, and Here’s What You Need to Know…

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Epizyme Inc (NASDAQ: EPZM) shares ended up over 10% today, but it was a volatile session for the clinical-stage biopharmaceutical company. The company sold off shortly after the open, after it reported interim data from its Phase II trial of tazemetostat. However, the stock rebounded after investors were able to digest the information and soared off of the data release. That said, let’s take a look at the catalyst and how it affected the stock.

Epizyme Reports Positive Interim Data From Phase II Trial

Epizyme Inc announced positive interim efficacy data from its ongoing Phase II trial of tazemetostat.  The treatment is a first-in-class oral EZH2 inhibitor used as a treatment for relapsed or refractory patients with follicular lymphoma. Additionally, tazemetostat could be used as a single-agent treatment for diffuse large B-cell lymphoma grouped by EZH2 mutational status.

According to Franck Morschhauser, M.D., Ph.D., Centre Hospitalier Régional Universitaire de Lille, France, and lead investigator of the Phase 2 study, “I believe that tazemetostat may play a significant role in disease management for my patients, and am particularly excited by the impact observed in patients with follicular lymphoma.”

Morschhauser continued, “I am also encouraged by the level of activity in DLBCL patients with EZH2 mutations, especially in light of the bleak prognosis associated with advanced disease. Tazemetostat has demonstrated a uniquely tolerable safety profile, and I look forward to further exploring its full benefit in patients with relapsed or refractory FL and DLBCL as the data mature.”

The  safety data from 210 patients in the Phase II trial exhibited a favorable tolerability profile, which was consistent with the observed experience in a nearly 400-patient safety database from tazemetostat clinical trials to date.

What You Need to Know About Epizyme

 

Now, when it comes to biotech and pharmaceutical stocks, it could be hard to figure out which direction the stock might go until the market is able to digest the information. This happened with EPZM today. Check out the 15-minute chart on EPZM.

Source: TradingView

 

  • EPZM shares have been down over 30% over the past three months, as of June 13, 2017. Additionally, it’s been down over 7% year to date.
  • Epizyme had shares outstanding of 58.36M, shares floating of 23.43M and 5.02M shares short, as of May 31, 2017. That said, it had a short percentage of float of 21.44% and a short ratio, or days to cover, of 11.19.
  • EPZM had a price-to-book ratio of 3.7, while the biotech industry average was 6.1. Additionally, it had a trailing 12-month price-to-sales ratio (P/S) of 85.7, while the industry average was 6.2.

Check out EPZM on the daily chart.

Epizyme

Source: TradingView

Bear Case

Epizyme shares gapped down this morning, but ultimately rebounded and closed up over 10% on the day. Although the company reported positive interim data from its Phase II clinical trial of tazemetostat, there still may be some reasons traders may want to be short the name. The stock may be undervalued, when comparing its trailing 12-month price-to-sales ratio and price-to-earnings ratio to the industry average. Moreover, some may be looking for this trade as a mean reversion.

Bull Case

Now, the stock announced positive interim data, which is a positive catalyst, and some traders may be thinking it could build momentum and continue higher. Moreover, EPZM was near the lower end of its Bollinger Band recently, indicating it could rise.

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