Unilife Corp (UNIS) is turning heads today, with the drug company posting an impressive one-day move only common for small caps stocks. So far in Wednesday trading, UNIS stock has gained nearly 44%.
The catalyst for the gap-up in UNIS stock? Well, Unilife Corp — which designs, develops, manufactures and supplies injectable drug delivery systems — signed a long-term commercial supply contract with Hikma Pharmaceuticals. The deal is for the use of Unifill prefilled syringes with a range of generic injectable drugs, and was music to the ears of UNIS stock investors.
Such supply deals are a big deal for the core business of Unilife Corp. In fact, UNIS stock doubled over the course of two trading days in May when the company’s third-quarter earnings report showed a new 15-year supply and customization contract with a leading U.S. pharmaceutical company.
And thanks to both big bumps — and the rockiness that came in between — UNIS stock has gained around 80% since the start of 2013. Take a look:
A Tough Road for UNIS Stock
Still, the year-to-date chart of UNIS stock hardly tells the whole story. For the most part, Unilife Corp has been in a race to the bottom, and the drug company isn’t even profitable.
In early 2010, shares of UNIS were going for nearly $10. Now, they are trading for just $4 — even after today’s big percent gain.
With that in mind, UNIS stock sums up the giant risks and giant rewards that come with betting on small cap stocks and penny stocks. If you time it right, you can double your money in the blink of an eye.
But even then, betting on a pick like UNIS stock mean betting on a risky, unstable businesses — and just like that, things can go south with no sign of stopping.
Other small cap stocks and microcap stocks that soared in Wednesday trading were Zhone Technologies (ZHNE), Oxygen Biotherapeutics (OXBT), Inovio Pharmaceuticals (INO) and Galena Biopharma (GALE).
ZHNE stock climbed over 34% by mid-afternoon, while OXBT stock wasn’t far behind with a 26% gain. Meanwhile, INO stock and GALE stock both improved by just under 10%.
As of this writing, Robert Martin did not hold a position in any of the aforementioned securities.