Surprisingly, the very next morning, Wednesday, Vion sent out a press release saying that it will:
suspend enrollment and further patient treatment in its Phase III clinical study of Cloretazine® (VNP40101M) for patients with relapsed adult myelogenous leukemia [AML] pending a detailed review of all of the data from the trial. This decision was based on the recommendation of the trial's independent Data Safety Monitoring Board [DSMB] after a planned interim analysis.
Shares promptly sold off in pre-market action to the tune of a 60% decline in price.
Stocks on the BHI BioWatch Alert list have generally done well, with the first five stocks averaging a high of 17% within two weeks. Only Provectus (NYSEMKT:PVCT) was a loss. The purpose of the watch list is to catch stocks right before a major move, hopefully a positive move!
So here's my question; how could a stock, that traded up more than 6% on almost five times the 3-month daily average volume, and finished only 12% away from the 52-week high, come up with a devastating news release the next day and plunge more than 60%?
Whatever the answer may be, this event will reinforce the notion that investing in small biotechs for short term gains will always be a risky endeavor to say the least.