XBiotech Extending Yesterday’s Gains, After Phase III Findings

XBiotech Inc (NASDAQ: XBIT) shares ended the day up over 9%, and extended its more than 25% gain yesterday. Now, this move could be attributed to the company’s presentation of data from its European Phase III study of its Hutruo (MABp1) advanced colorectal cancer patients on June 3, 2017. That in mind, market participants may be buying ahead of this catalyst event, and this could potentially be an interesting short squeeze. However, with Phase III results, anything could happen, and there may be reasons why some traders are bearish and bullish on XBIT.

XBIT Upcoming Catalyst Event

XBiotech will be presenting data for its Phase III study of Hutruo at the 2017 American Society of Clinical Oncology on June 3, 2017. The abstract entitled, “MABp1 Improves Clinical Outcomes of Patients With Sympotmatic Refractory Metastatic Colorectal Cancer Patients: Per-Protocol Population Analysis of Phase III Study (PT026),” would provide analysis of the efficacy of the treatment.

Now, in the Phase III study, 82% of all the patients who participated in the study received at least one dose of Hutruo completed the eight week treatment regimen. Additionally, 40% of the per protocol patients who received treatment with the antibody therapy achieved the primary endpoint, and nearly double compared to the placebo.\

Dr. Lucjan Wyrwicz of the Maria Sklowdowska-Curie Memorial Cancer Centre, Institute of Oncology, Warsaw, stated“This analysis confirms our previous report that in an advanced cancer population, the combination of patient-reported symptoms and radiography used as the primary endpoint is a powerful measure of disease progression.”

Wyrwicz continued, “These findings show that the use of this endpoint to measure disease modifying anti-tumor therapies is a logical surrogate to assess new anti-cancer agents in chemorefractory patients.” 

That in mind, traders may be buying ahead of this event, anticipating that the company will report positive data, and consequently, they’re looking for the stock to rise on Monday. Moving on, let’s take a look at some statistics on XBIT.

What You Need to Know About XBiotech

  • XBiotech will present data from its European Phase III Hutruo study on June 3, 2017.
  • XBIT shares were up 26.59% yesterday, following the announcement of its data presentation on June 3, 2017. XBiotech has been down over 30% over the past three months.
  • According to Finviz, XBIT has 16.64M shares floating and 25.66% short float.
  • The stock is nearly 60% off of its 52-week highs, and just over 40% above its 52-week lows.
  • XBIT formed a falling wedge, and yesterday’s candle broke above the upper downtrend line, and the stock closed over 9% higher today.

Check out XBIT on the daily chart.

XBiotech

Source: TradingView

Bull Case

Some traders may be bullish on XBIT due to its continued momentum and its low float. Since the stock has a low float, coupled with a high short interest, yesterday’s and today’s performance may spiral into more buying pressure, potentially causing a short squeeze on Monday, if XBiotech presents positive data in its presentation tomorrow.

Bear Case

On the other hand, some traders might be looking for the stock to present data that may be unfavorable, or for the presenter to make comments regarding Hutruo that could potentially be viewed as negative. Moreover, some bearish traders may be viewing this as a contrarian, or mean reversion trade, as the stock has been up over 30% in the past two trading sessions.

Final Thoughts

XBiotech will be presenting data tomorrow, and traders will be focused on this catalyst event. By Monday, traders should have already digested this information, and the stock could see a clear directional move, depending on the outcome of the presentation.

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