Despite rather weak price action in today’s market, there are certain pockets of stocks that are outperforming. Right now, biotech is one of the sectors many investors are looking at. In this sector, certain microcaps like Lexaria Bioscience (NASDAQ:LEXX) are outperforming today. LEXX stock has soared more than 18% so far on heavy volume.
Now, it should be noted that Lexaria is a penny stock. Even after today’s impressive rise, the company is still worth less than $25 million. Accordingly, this is a high-risk, high-reward stock pick.
That said, these kinds of moves are precisely the reason investors own biotech stocks. The potential for a surge of 20% or more in a given day is why investors often own baskets of these names. Most of these moves come amid newly released data, precisely the type of news driving LEXX higher right now.
So, let’s dive into the study resulting in newfound interest for Lexaria today.
LEXX Stock Surges on Positive Clinical Study Results
Clinical-stage biotech companies like Lexaria often require significant patience. Investors can research the drugs in a given company’s pipeline all they want, but it’s how the studies of those drugs ultimately perform that matters. Drug trials are a key factor that drive the valuations of these companies.
Today, though, Lexaria delivered some positive results from its key clinical study of a pulmonary hypertension drug. Specifically, the company’s DehydraTECH-CBD treatment showed positive safety and efficacy findings from its HYPER-H21-3 study.
This study showed that patients using the treatment saw statistically significant improvements versus a placebo. The news marks the latest positive results for the company, which aims to treat a range of ailments using cannabinoids and other compounds.
Right now, LEXX stock is a name I’m going to put on my watch list. The company certainly appears to have some interesting upside potential. That said, as mentioned, it’s a higher-risk, higher-reward play. Accordingly, investors looking at LEXX stock should factor risk into their decision-making process.
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On the date of publication, Chris MacDonald did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.