Drug developer’s share price has gotten ahead of itself.
Inspire Pharmaceuticals (NASDAQ: ISPH, Stock Forum) made a run for the ages, rising 35% at the end of the week to hit $5.19. That is still below that company's 52-week low of $7.27.
ISPH is developing a cystic fibrosis treatment to improve patients' lung function and it has done well in a late-stage study.
Not everyone was buying it. Cowen & Co made that fairly negative comment "Our overall conclusion is that the statistical significance on the FEV1 endpoint (study goal) is positive, but is marginal enough that we have a bit less conviction in the second, ongoing Phase III trial achieving significance."
The firm will have to come up with more to defend its new, higher price. It traded almost 11 million shares on the announcement, so there are a lot of investors who hope to make money at higher prices. If the stock begins to move down, there is a lot of money that will try to get out without posting big losses.
Last year, the company had negative operating income of $66 million on $49 million in revenue. That makes justifying a $400 million market cap pretty hard.
