It may be a mixed session for the overall market on Thursday, but not for Provention Biosciences (NASDAQ:PRVB). That’s as PRVB stock is up 25% so far in the session and hitting its highest level since July 2021.
The stock has already changed hands more than 14 million times, its highest one-day total in more than a year. Today’s rally comes after the company reported its third-quarter results. Shares of PRVB stock opened higher by roughly 13% on the day. However, the stock gained steam as investors digested the report and the conference call.
Provention Biosciences reported a loss of 34 cents a share, but that beat analysts’ expectations by 8 cents. Sales of $756,000 tip-toed past expectations and grew 11.5% year over year.
As we pivot to the balance sheet and cash situation, it’s a mixed bag. On the one hand, management believes it has enough assets to “fund the company’s operating requirements for at least the next 12 months.”
It’s good that over the next year, Provention Biosciences believes it has enough funds to operate. However, the fact it’s even a question is a bit concerning — particularly in an environment where we have a bear market and tightening lending.
This situation is not necessarily bad or unique to this company, but it is something to be aware of. Investors aren’t exactly buying Pfizer (NYSE:PFE) or Johnson & Johnson (NYSE:JNJ).
In any regard, PRVB stock is certainly going to catch some attention as it makes new 52-week highs. Plus, it still has another catalyst to focus on that may make the cash situation an afterthought.
Breaking Down PRVB Stock
The stock market is obviously giving a stamp of approval to the quarter. The stock wouldn’t react in such a bullish manner if investors disliked the quarter. That’s particularly true a day after the Federal Reserve raised interest rates and squashed the idea of a dovish pivot.
While earnings were the vehicle in which the news was delivered, they are not necessarily the catalyst for the rally in PRVB stock. In regards to its teplizumab drug, CEO Ashleigh Palmer said:
“As we approach our upcoming November 17th FDA action date, we are pleased to report that we have received both the FDA’s proposed labelling and post-marketing requirements and commitments, and that these are generally consistent with our expectations.”
Last month, the company had entered into an agreement with Sanofi (NASDAQ:SNY) in preparation for its potential launch of teplizumab in the U.S. On top of a one-time payment in the companies’ co-promotion agreement, Sanofi agreed to buy $35 million in PRVB stock if teplizumab is approved by the Food and Drug Administration (FDA).
In this scenario, mid-November is going to be critical to PRVB stock going forward. FDA approval will be a huge advancement for Provention Biosciences and should it happen, it wouldn’t be surprising to see the stock back on the 52-week high list.
On the date of publication, Bret Kenwell did not have (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.
