Commercial-stage bioelectronic medicine company ElectroCore (NASDAQ:ECOR) largely flew under most traders’ radars prior to the onset of the novel coronavirus. But as experienced medical-company investors know, it just takes one regulatory decision to change everything. That’s certainly the case with ECOR stock.
A recent decision from the U.S. Food and Drug Administration had a profound impact on this little micro-cap company. It also indubitably provided a shot in the arm to frustrated long-term ECOR investors.
Now, ECOR shareholders have to decide whether to unload their shares and prospective investors must assess the stock at its current price point. An objective examination should uncover solid reasons to hold the shares and perhaps even add to your position today.
A Closer Look at ECOR Stock
July 13 was a banner day for ECOR stockholders. For reasons that will soon be analyzed, the shares gained a jaw-dropping 155% on that day.
It surely was a relief for long-standing stakeholders as ECOR had languished for many months. Back in the summer of 2018, ECOR stock was close to the $20 level. A series of gut-wrenching declines followed.
The bottoming process wasn’t achieved until March of this year. That’s when ECOR stock touches its heartbreaking 52-week low of just 32 cents. One couldn’t really blame shareholders if they simply gave up all hope for this company.
Then, something akin to a miracle (or at least, government intervention) happened and the stock was suddenly threatening to pierce through $2.50. However, the euphoria wouldn’t last too long. As of July 27, ECOR had retraced to $1.55.
Will ECOR’s shareholders be subjected to yet another round of price declines? Let’s see if the latest and most important catalyst can provide some clues.
A Core Event for ElectroCore
Thanks to the tireless due diligence of InvestorPlace contributor William White, I was able to quickly get the scoop on the FDA’s big decision.
Reportedly, the FDA granted emergency-use authorization for ElectroCore’s “gammaCore Sapphire CV non-invasive vagus nerve stimulation,” which “can treat adult patients suffering from the coronavirus, or those that are suspected to be.”
ElectroCore’s official press statement drills down on the details even further. It specified that the treatment is to be used with patients “experiencing exacerbation of asthma-related dyspnea and reduced airflow, and for whom approved drug therapies are not tolerated or provide insufficient symptom relief.”
Be advised that emergency-use authorization is not the same as full, permanent approval. Nevertheless, it’s a huge green light and a perfectly legitimate reason for traders to bid up the ECOR share price.
A Timely Treatment
The implications of the FDA’s emergency-use approval are clearly positive for the medical community. The vagus nerve stimulation procedure implemented through ElectroCore’s technology is not only relatively non-invasive, but has the potential to provide a measure of symptomatic relief for a particular subset of Covid-19 sufferers.
A significant detail is that the treatment has been approved by the FDA for both home and healthcare settings. This is important as not every sufferer of Covid-19 will have access to a hospital or clinic.
Let’s also not ignore the fact that the treatment doesn’t require surgery or other highly invasive procedures. It does involve “non-invasive vagus nerve stimulation” on either side of the patient’s neck. That doesn’t sound like a picnic in the park, but most patients would probably choose it over surgery any day of the week.
And if this emergency-basis trial has successful outcomes, there’s the potential for a full approval from the FDA. We can only imagine how high the ECOR share price would fly if/when that happens.
The Bottom Line on ECOR Stock
At long last, there’s a compelling reason to hope that ECOR stock will find its way back to $4 and even $6.
It just goes to show that regulators are all-powerful in the medical space. But ElectroCore deserves tremendous credit for its potentially industry-changing Covid-19 symptom treatment technology.
David Moadel has provided compelling content – and crossed the occasional line – on behalf of Crush the Street, Market Realist, TalkMarkets, Finom Group, Benzinga, and (of course) InvestorPlace.com. He also serves as the chief analyst and market researcher for Portfolio Wealth Global and hosts the popular financial YouTube channel Looking at the Markets. As of this writing, David Moadel did not hold a position in any of the aforementioned securities.